Introduction: The Lord Bishop of Bath and Wells

The Lord Bishop of Bath and Wells—Peter Bryan, Lord Bishop of Bath and Wells, was (in the usual manner) introduced between the Lord Bishop of Southwark and the Lord Bishop of St Albans.

Finance: Offshore Centres

Lord Wallace of Saltaire: asked Her Majesty's Government:
	How they intend to work with other Governments to ensure that offshore financial centres respect the principles of openness and disclosure with a view to restoring financial stability in international markets.

Lord Myners: My Lords, we are witnessing unprecedented turmoil in global financial markets that needs international solutions. Co-operation with international partners is crucial to an effective global response, and to this end we will continue to work with those partners, including the Financial Stability Forum and the G20. Given their role in hosting offshore financial centres, the Crown dependencies and Overseas Territories have an important role to play in this international response.

Lord Wallace of Saltaire: My Lords, I thank the Minister for that Answer. In his Statement yesterday, the Prime Minister promised that he would bring greater transparency to tax havens by including them in the scope of the financial system. Will the Minister confirm that "tax haven" and "offshore financial centre" are interchangeable concepts? I know that some Crown dependencies object very strongly to being called tax havens, but actually an offshore financial centre is a place where people put their money in order, among other things, to minimise their tax obligations, and therefore it is a tax haven.
	Will he also confirm that half of the OECD-listed financial centres are under Crown sovereignty and that Britain therefore has a particular role to play not only with the Crown dependences but also the Overseas Territories in making sure that transparency and disclosure as promised by the FSB and the FATB are fulfilled?

Lord Myners: My Lords, 10 of the 35 low-tax jurisdictions identified by the OECD are either Crown dependencies or Overseas Territories. We fully support the efforts being made by the OECD, in particular as a consequence of its meetings in Paris in October and the forthcoming meeting in Berlin, to improve transparency and the supervision of these centres in respect of both regulation and tax matters. We are encouraging offshore financial centres to enter into tax and information exchange agreements. I am pleased that there has been some progress, and we would like to see a lot more.

Lord Barnett: My Lords—

Lord Davies of Coity: My Lords—

Lord Hunt of Kings Heath: My Lords, let us hear from my noble friend Lord Barnett first. I am sure that there will be time for both noble Lords to speak.

Lord Barnett: My Lords, will my noble friend give a definition of an offshore financial centre? Under certain definitions, could the United Kingdom be considered to be one of those centres? Some billionaires, and even modest millionaires, come here from time to time and are evading or avoiding tax. Apparently, we are counting how many days a lot of these people spend here. How many people are being counted, and if are they considered to be avoiding or evading tax, do we disclose that fact?

Lord Myners: My Lords, the UK is a world-leading financial centre, but it has not achieved that status for tax effectiveness reasons, and as such is clearly not included by the OECD in its list of territories. In recent years, we have taken steps to tighten up the process to reduce tax evasion, including through the tax and information exchange agreements to which I referred earlier. As a result of information exchanges with major banks, we recently secured more than £400 million of tax repayments, and we believe that there is considerable potential to extend the programme further. We also announced last year further changes to non-domicile status, in particular to ensure that those who stay here for longer than seven years make a fair contribution to British society and the British economy. I cannot quantify tax evasion because by its very nature it is not a figure that is easy to place. However, we are vigilant in our pursuit of tax evasion.

Lord Trimble: My Lords, I noticed that the Minister, in referring to international agencies, did not mention the European Union. May I suggest that he looks closely at the suggestions for added regulation coming from the EU that, if not checked, could have the result of driving all the banks offshore?

Lord Myners: My Lords, we are looking carefully at the recent proposals for tightening the savings directive. Inasmuch as they reduce the risk of money-laundering, reduce the risk of money flowing into counterterrorism and lead to greater tax transparency we will encourage them, but only on the basis that they do not impose disproportionate, excessive or unnecessary cost on UK financial institutions.

Lord Davies of Coity: My Lords, I am not sure if I should declare this interest, but I will do so for the sake of protection: I am chairman of the All-Party Parliamentary Group for the Cayman Islands, a British Overseas Territory.

Noble Lords: Oh!

Lord Davies of Coity: My Lords, is the Minister aware that the Cayman Islands financial services industry is fully committed to meeting international standards and criteria, that it has put in place the most rigorous regulatory and monitoring regimes and that it has enacted the relevant local legislation and demonstrated its commitment, as well as observing the European directive on bank accounts?

Lord Myners: My Lords, I am so aware.

Lord Newby: My Lords, does the Minister agree with President-elect Obama in wanting to crack down on tax havens, including Jersey, Guernsey and the Isle of Man? If so, and if the Government are committed to greater transparency in this area, why has the UK been blocking moves at the UN to upgrade its tax committee to intergovernmental status?

Lord Myners: My Lords, we are committed to ensuring that people meet their tax obligations. Many offshore financial centres play a vital role in international economics that is not solely dependent on the tax status, but we are working with our colleagues in the United Nations, the Financial Action Task Force, the OECD and the EU to increase scrutiny and supervision of offshore financial centres.

Baroness Noakes: My Lords, the original Question was about restoring financial stability in the international markets, but most of the supplementary questions have been about tax havens. Will the Minister explain what tax havens have to do with international financial stability?

Lord Myners: My Lords, I am answering the questions that I am asked.

Visas: Macedonia

Lord Foulkes of Cumnock: asked Her Majesty's Government:
	What consideration they have given to removing the need for citizens of the Republic of Macedonia to have a visa when visiting the United Kingdom.

Lord West of Spithead: My Lords, the United Kingdom Border Agency undertook a comprehensive review of the United Kingdom's visa regimes in 2007. The results of this review regarding Macedonia were such that the Government have no plans at present to lift the visa requirements for Macedonian citizens.

Lord Foulkes of Cumnock: My Lords, my noble friend will be aware that, when they were citizens of Yugoslavia, Macedonians could come here without visas and, once they join the European Union, they will be able to come here without visas. In the interim, however, there is an anomaly, causing an adverse effect on both trade and tourism. I plead with the Minister to ignore the bureaucrat's brief in front of him, exercise the leadership for which he has become famous and go back to the Home Office and sort this matter out.

Lord West of Spithead: My Lords, I thank my noble friend for the accolade, which, given that we are talking about Macedonia, makes me feel somewhat like Alexander. I would never follow a bureaucrat's brief word for word. I have looked at this issue. Whereas when Yugoslavia was a complete nation the rules were different, we have now undertaken this comprehensive review and I am afraid that we do not feel that most of the western Balkan countries meet the requirements for us to allow their citizens to enter this country without visas.

Lord Avebury: My Lords, when the comprehensive review of the visa regime that the Minister mentioned was undertaken by UKBA, we were looking at imposing visas on citizens of three countries—Brazil, Malaysia and Venezuela—who are currently not subject to our visa regime or, I believe, to visa regimes in the European Union. What was the result of that review? Are we taking part in the European Union review of visa regimes in relation to not only Macedonia but also Ukraine? What steps are being taken to harmonise our visa regime with those of the European Union as a whole?

Lord West of Spithead: My Lords, the visa waiver test identified 11 countries on which we propose to introduce new visa regimes, but these were subject to a six-month review, which is ongoing; we will not know the result until 2 January. We have talked to these countries and outlined the issues that we are concerned about: how passports are issued, co-operation on documentation and a whole series of things. We are negotiating with these countries and, if we come to an agreement, we could possibly waive the visa requirement. Of course, we require visas for 110 other countries because we do not believe that they have gone anywhere near meeting those steps and we demand the visa regime to ensure the safety and security of our country.

Lord Pearson of Rannoch: My Lords, how do Her Majesty's Government justify the present position whereby not only Macedonians but also citizens of the United States, Australia, Canada and New Zealand need a visa to come to this country, whereas Bulgarian and Romanian gangsters are free to come and go as they wish?

Lord West of Spithead: My Lords, I like to think that SOCA and various other organisations would bowl out various gangsters. As the noble Lord well knows, Bulgaria and Romania are part of the European Union and we have agreements there. People from member states do not need visas to travel throughout the European Union, which is part of being part of the EU.

Lord Anderson of Swansea: My Lords, there is evidence from the last elections in Serbia that the younger elements, who cannot travel on Yugoslav passports as their parents did, are the most nationalistic parts of the population. Does my noble friend agree that, if we are serious about integrating the western Balkans as a whole into the European Union, we must ensure that younger people and people generally are able to travel to prepare themselves for entry, which is in our interests and theirs?

Lord West of Spithead: My Lords, the fact that there are visa requirements does not stop youngsters travelling. I agree completely with my noble friend that movement, travel and the ability to visit by youngsters is a very good thing, particularly for those visiting our rather splendid country. It is wonderful for them to be able to see how this nation operates and what happens here. If they take those things back to their country, it is good for us all.

Baroness Hanham: My Lords, does the Minister understand that the difficulty with people coming to this country is that, by and large, they need to be sponsored? Can he say whether the number of employers who are happy to sponsor people to come to work or visit here is sufficient to enable them to do so?

Lord West of Spithead: My Lords, I have spotted that the noble Baroness specialises in asking questions to which I do not know the exact answer. As far as I am aware there are, but I hope that I may get back to her in writing. I was told in the briefing that this would not have an impact on visits and things, but I would like to clarify that to be absolutely certain.

Wealth Distribution

Lord Sheldon: asked Her Majesty's Government:
	What is the proportion of wealth currently held by the richest 10 per cent of the population.

Lord Myners: My Lords, in 2003—the latest year for which figures are available—it was estimated that the richest 10 per cent of the population owned 53 per cent of the wealth in the United Kingdom.

Lord Sheldon: My Lords, I thank my noble friend for that reply. For a number of years now, many of those with the highest level of income derived from their wealth have, by various means, avoided paying the rates of tax paid by those with much lower incomes. This should not continue indefinitely. But more immediately, why have the Government not made a fairer relationship between normal taxpayers and those with large incomes by introducing tax on a new level of income greater than 40 per cent?

Lord Myners: My Lords, if the noble Baroness, Lady Noakes, will allow me to answer a question relating to tax, the GD co-efficient of wealth distribution shows that a significant widening of inequalities of wealth during the 1980s and early 1990s has reversed somewhat in the current decade. In part, that is a consequence of tax policies, the national minimum wage and benefits. The proportion of tax paid by the wealthy continues to increase. The top 10 per cent of income tax payers pay more than 50 per cent of all income tax proceeds.

Lord Newby: My Lords, does the Minister accept that if you are talking about wealth as opposed to income, the relevant taxes are those on capital? Does he see the merit in having a capital gains tax rate that applied at the same level as income so that the wealthy did not have an incentive to go down a capital gains tax route, which means that they are paying tax at a lower rate than ordinary rate taxpayers?

Lord Myners: My Lords, earlier this year steps were taken to increase the rate of capital gains tax to match it with income tax in respect of the general partners in private equity firms. The Chancellor of the Exchequer gives very careful consideration to tax rates. If he wished to change those rates, he would no doubt do so as part of his Budget Statement.

Lord Inglewood: My Lords, what effect does the Minister consider the recent turmoil in the financial markets will have had on the figures he gave in his initial response to the noble Lord, Lord Sheldon?

Lord Myners: My Lords, that is a difficult question to answer with any precision, but it is likely that the decline in the value of marketable securities, land and property will have had a disproportionate effect on wealthier people.

Lord Pearson of Rannoch: My Lords, would the Minister care to cast any light on the proportion of national wealth enjoyed by the richest 10 per cent in socialist countries? For instance, in the former Soviet Union, was it not rather nearer 90 than 53 per cent?

Lord Myners: My Lords, I am not in a position to give the noble Lord a precise answer to that question. However, according to the OECD, we have seen the most significant move towards wealth and income equality recorded this decade within the OECD countries.

Baroness Gardner of Parkes: My Lords, perhaps the Minister could make clearer for simple people like myself what he meant by "disproportionate". Did he mean that the wealthy had suffered more or less than other people under the present financial circumstances?

Lord Myners: My Lords, I apologise to the noble Baroness if I was not clear. I mean that they will have suffered more in proportion to their wealth.

Lord Desai: My Lords, does not the fact that a severe stock market crash has reduced wealth inequality show that we have a somewhat false way of calculating true wealth? Perhaps we ought to revise our consideration and include houses not at current prices but at the long-run supply price: that would give us a more realistic account of what wealth is. We cannot have wealth being high one day and low the next: that cannot be true economics.

Lord Myners: My Lords, there are limitations to the methods used by the ONS and HMRC for calculating wealth and wealth distribution. They use the Gini coefficient, which is derived from the Lorenz curve. They use probate material that they supplement by modelling adjustments. At the heart of the question of the noble Lord, Lord Desai, is a very acute and correct observation. More importantly, a new wealth and assets survey has been introduced, covering a cohort base of more than 32,000 people, which will measure the progress of their wealth, including assets such as pensions claims. As times goes by, we will get much more reliable data from this new series, on which we will make our first report next year.

The Lord Bishop of Exeter: My Lords, around 13 million people in this country are estimated to be living in poverty. If the Government are going to use any proportion of tax revenue, however raised, to spend their way out of recession, what financial help will be given to those who support those at the poverty end of the wealth-inequality spectrum, such as credit unions and workers' co-operatives? What will be done to provide more help for hard-pressed agencies such as the CAB and debt centres, which are so vital at the poverty end of the spectrum, particularly in this economic downturn?

Lord Myners: My Lords, the right reverend Prelate may be seeking to draw me on what might be contained in the Pre-Budget Statement next week. In that, he will fail, because I am not aware of what will be said on issues to do with taxation.
	This Government have done much to help those who are in poverty, as defined by national statistics, through benefits, credits, the national minimum wage, housing assistance, winter fuel allowances, child trust fund arrangements, savings gateways and open-market home-buying. There is a series of initiatives to help those people and the agencies on which they rely for support.

Baroness Noakes: My Lords, the Minister said that the Government have been doing rather well on poverty. However, the plain fact is that there are rather more people in relative poverty than there were in 1997, and child poverty has been increasing for the past two years. What do the Government say about that?

Lord Myners: My Lords, 2 million people have come out of poverty since 1997.

Lord Roberts of Llandudno: My Lords, with the suggestion that the CAB, for instance, needs to be supported at this time, local government will be hard pressed to continue with grants to local citizens advice bureaux. Can the Government give an assurance that they will keep an eye on this and make sure that the CAB is there to meet the needs of this crisis?

Lord Myners: My Lords, the Government have placed great emphasis, in their programme of addressing the consequences of the global crisis that has affected our financial institutions, on promoting responsible lending, by engaging with banks to ensure that they behave responsibly with customers and borrowers who are experiencing difficulties. One core condition attached to the bank recapitalisation arrangements that we introduced was that the banks have committed to expend more funds to support the relationship with customers experiencing difficulties. We recognise that, in particular, citizens advice bureaux play a very important role in helping people who are experiencing difficulties. We commend their work and hope to be able to continue to support them.

Defence Intelligence Staff

Lord Craig of Radley: asked Her Majesty's Government:
	Whether they intend to reduce the size of the Defence Intelligence Staff; and, if so, why.

Baroness Taylor of Bolton: My Lords, I am sure that the whole House will wish to join me in offering sincere condolences to the families and friends of Marines Robert McKibben and Neil Dunstan and Colour Sergeant Krishnabahadur Dura, who were killed on operations in Afghanistan this week.
	As part of the Ministry of Defence's streamlining exercise, Defence Intelligence Staff elements based in central London will be reduced in size by around 20 per cent. DIS establishments outside central London, which constitute nearly 90 per cent of its overall manpower, are not affected by streamlining. Streamlining will improve the way in which the MoD head office works, creating a smaller, more agile and efficient organisation.

Lord Craig of Radley: My Lords, I thank the Minister for that Answer. She will recall the Butler inquiry four years ago, of which she was a member. It said:
	"DIS is a vital component of and contributor to the national intelligence machinery ... DIS is crucial to MoD in everything from strategic planning through equipment acquisition to the conduct of military operations".
	Is not any reduction in intelligence provision to our Armed Forces akin to committing them to combat with inadequate or inferior equipment? With ongoing operations, surely that is both operationally and morally indefensible.

Baroness Taylor of Bolton: My Lords, the noble and gallant Lord knows very well the work done by defence intelligence, as do I. He mentioned that I served on the Butler review. The review said that if increased funding to the single intelligence account was required to commission DIS expert resources, that funding should be found. Most of the extra funding that has gone to the single intelligence budget has been for counterterrorism work. We are satisfied that the changes that we are making will not have an adverse effect. As I said, 90 per cent of the staff of DIS work outside London, and they are not at all affected.

Lord Astor of Hever: My Lords, we on these Benches also send our condolences to the families of the two soldiers killed, both serving with 2 Battalion the Royal Gurkha Rifles. The noble and gallant Lord raises a very important Question. What assessments have the Government made of the impact of the proposed cuts on intelligence sharing with friendly nations?

Baroness Taylor of Bolton: My Lords, there has been significant consultation about the proposals. We work very closely with our allies in this field. It is not just the MoD that is involved; work very closely with other government departments, and all the potential customers for DIS have been consulted. Many of the reductions will be made because we are significantly reducing the business support staff, and that can be achieved as a result of the planned co-location in London, where we are going from three sites to one site, which in itself will have significant benefits in London. As I said earlier, 90 per cent of those working for DIS do not work in London and are not affected at all by streamlining.

Lord Addington: My Lords, first, let me associate these Benches with the condolences given. Will the Minister assure us that the Government have a bottom line as to how many cuts can be made, and that the bottom line will reflect the fact that we have to occasionally act independently and thus will not be able to tap into the resources of our allies' intelligence?

Baroness Taylor of Bolton: My Lords, I can give an assurance. The chief of defence intelligence said recently:
	"The area is funded for what it is being asked to do from the central defence budget and will continue to support the Armed Forces and contribute strongly to the intelligence community's work across government".
	As I said earlier, we discussed this with our allies and with other customers, and we are confident that DIS can be a stronger organisation.

Lord King of Bridgwater: My Lords, is the Minister aware that her Answer fills me with considerable concern? I am not clear what the prime motivation is and whether it is to save money. If there is one thing that this Government should have learnt, it is that with serious shortages of resources in many areas, intelligence has never been more important when prioritising whatever resources you have and in facing new ventures. As new ventures come—for example, now there is the threat of hijacking and piracy—there are new challenges that intelligence will have to face.
	The noble Lord, Lord West, who is sitting beside the Minister, knows perfectly well, as a former chief of defence intelligence, the importance of this. This Government could have saved the nation a huge amount of money if, before the weapons of mass destruction issue arose, they had listened rather more carefully to the Defence Intelligence Staff.

Baroness Taylor of Bolton: My Lords, I must rebut very strongly the last comment. As a member of two of those inquiries, I do not think there was any problem in terms of people listening to defence intelligence at that time. The Government definitely recognise the significant importance of intelligence, both to us and to our allies. The degree of co-operation we have, both across government and with our allies, is very good. We have a highly respected and capable Defence Intelligence Staff, of which we are proud and intend to remain proud.

Lord Foulkes of Cumnock: My Lords, would my noble friend remind the House, particularly the noble Lord, Lord King, by how much the single intelligence account has risen in the past few years?

Baroness Taylor of Bolton: My Lords, the defence budget is £34.1 billion. We have just seen the longest sustained growth in that budget for over 20 years. In 2010-11 it will be 11 per cent higher than it was in 1997. That does not include all the money for operations and urgent operational requirements which comes directly from the Treasury.

Lord Wallace of Saltaire: My Lords, was the Minister correct in putting that statement about rises in the defence budget in the past, thus implying that those increases are now over?

Baroness Taylor of Bolton: My Lords, I was anticipating what the situation would be by 2010-11.

Lord Boyce: My Lords, perhaps the Minister would like to say what percentage of GDP the defence budget will be in two years' time, compared to 10 years ago?

Baroness Taylor of Bolton: My Lords, I do not have the figures in front of me, but I recall that we are the second largest spender on defence in the world, second only to the United States. That shows this Government's commitment.

Planning Bill

Baroness Royall of Blaisdon: My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Planning Bill, have consented to place their Prerogative and Interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
	Before we move on to the Third Reading of the Planning Bill, it may be helpful for me to say a few words about Third Reading amendments in line with the guidance recommended by the Procedure Committee and agreed by the House. The Public Bill Office has advised the usual channels that two amendments on the Marshalled List for Third Reading today fall outside the guidance given in the Companion and set out by the Procedure Committee. These are Amendments Nos. 1 and 28 in the names of the noble Lord, Lord Reay, and the noble Earl, Lord Caithness. On the basis of the Public Bill Office's advice, the usual channels have agreed to recommend to the House that neither amendment should be moved. As ever, ultimately, this is a matter for the House as a whole to decide.

Bill read a third time.
	Clause 10 [Sustainable development]:
	[Amendment No. 1 not moved.]
	Clause 12 [Pre-commencement statements of policy, consultation etc.]:

Baroness Andrews: moved Amendment No. 2:
	Clause 12, page 7, line 17, leave out from "statement" to "or" in line 18 and insert "is a pre-commencement statement"

Baroness Andrews: My Lords, I shall speak also to Amendments Nos. 3 to 6. This is a group of minor and technical amendments which would make the drafting of Clause 12 simpler by the use of the defined expression, "pre-commencement statement". This avoids inelegant repetition of words in subsection (1). I beg to move.

On Question, amendment agreed to.

Baroness Andrews: moved Amendments Nos. 3 to 6:
	Clause 12, page 7, line 20, leave out from beginning to end of line 21 and insert "pre-commencement statements"
	Clause 12, page 7, line 31, leave out subsection (3)
	Clause 12, page 7, line 42, at beginning insert "In this section—"
	Clause 12, page 7, line 43, at end insert—
	""pre-commencement statement" means a statement issued by the Secretary of State before the commencement day."
	On Question, amendments agreed to.
	Clause 25 [Railways]:

The Duke of Montrose: moved Amendment No. 7:
	Clause 25, page 17, line 19, at end insert "or a mainline railway between England and Scotland linking major population centres"

The Duke of Montrose: My Lords, I will speak also to Amendment No. 29, which is consequential on Amendment No. 7. I thank the Minister for a number of useful explanations, which have been sent to us over the past few days and have helped to clarify the various issues with which we have been concerned. I have tabled the amendments because some areas of national infrastructure are clearly devolved and within the competence of the Scottish Executive, for which the correct convention for any legislative process is that a Sewel motion would be required. However, in addition, I get the sense that the Government are concerned that there might be areas where we stray unwittingly into devolved territory. To my mind, my amendment deals with an important area that is clearly not devolved but has great importance to the future, especially the economic well-being, of the whole country. As noble Lords will be aware, we have touched on the subject at various stages in the passage of the Bill.
	When the Scotland Act was passed in this House, the provision and regulation of rail services was clearly a reserved matter. Since then, an interesting series of statutory instruments have made many useful amendments to the situation. The first enabled the Scottish Parliament to transfer to certain Scottish public authorities the same rail responsibilities exercised by a passenger transport authority. The second was to give the Scottish Executive power to provide grants to the Strategic Rail Authority for the funding of services for the carriage of passengers by rail, specifically those which,
	"start and end in Scotland and are provided under a franchise agreement".
	Of course, that has now been modified to allow Scottish Ministers to take over from the Strategic Rail Authority. It is only when we come to the next measure, Statutory Instrument 2002/1629, to which I drew your Lordships' attention on Report, that the legislation deals with anything to do with the powers for,
	"the promotion and construction of railways ... in Scotland",
	which is of course the area where a national policy statement would have any effect. When we debated that, the Minister made it clear that cross-border railways would continue to be dealt with at Westminster. Two further statutory instruments that I have seen allow the Scottish Parliament itself to exercise the functions previously confined to the passenger transport authority.
	I recognise that devolution has been an ongoing process, and the Government may wish to make further adjustments. The measures taken so far have made good sense and enabled useful improvements to be made to the running of railways in Scotland. As the Bill stands, the Infrastructure Planning Commission has a role in Scotland, as do national policy statements. My amendments are to ensure that it can consider cross-border railways. The point at which its powers might stray into the territory of the Scottish Executive would be if a policy were proposed that tried to lay down some specific structure or route for a national infrastructure project once it got into Scotland. At that point some kind of devolved consent would certainly be needed, and the commission will need to keep that at the forefront of its mind.
	Taking things forward from this, I ask the Minister to confirm that only the promotion of railways in Scotland and the funding of passenger services that start and end in Scotland are a directly devolved responsibility. Noble Lords will probably be aware that cross-border passenger trains that run to Edinburgh and Glasgow are the responsibility of the Department for Transport, and certainly will be of concern in considering national policy.
	Throughout all this legislation, there is no specific mention of the regulation of goods transport by rail, another area where a national policy statement would have an important bearing. Does the same degree of devolution that is stated as applying to passenger rail transport apply to goods?
	A rather curious adjunct to this occurs in Section 8(2) of the Railways Act 2005 which states:
	"The Scottish Ministers shall also have power, whether they do so wholly or primarily for Scottish purposes, to provide ... financial assistance to persons otherwise than under franchise agreements".
	This suggests that the Government can see a scene where the Scottish Government would take the initiative and pay for construction of a cross-border railway if it was felt to be in Scottish interests and there would be no need for an initiative from Westminster. Is that likely to be part of government policy?
	As the Minister will also be aware, at an adjournment debate last week in another place some of the problems that arise from our current position were aired. The main one related to the station at Lockerbie, which is run by the Scottish Transport Authority. No trains call at that station other than the cross-border trains. The maintenance of the station, therefore, is of no interest to anyone other than the people running the trains. The same thing happened at Dunbar but I believe that the Scottish Transport Authority now runs a train to Dunbar to help to overcome this problem. The people in Lockerbie were very exercised as there was no co-ordination on the timetables between any train they could catch going north that would link them up with trains that would run to either Glasgow or Edinburgh and get them into their work before nine o'clock. This was discussed at length. It shows that the national infrastructure plan should encompass the whole range of cross-border traffic. I beg to move.

Lord Boyd of Duncansby: My Lords, I declare my interest and refer in particular to the fact that I am a solicitor in private practice advising on planning issues. I am also a member of the Commission on Scottish Devolution.
	The noble Duke, the Duke of Montrose, has moved an interesting amendment in relation to cross-border railways. He is right to say that the responsibility for cross-border railways lies with the United Kingdom Government but I believe that the consenting process would be a matter for the Scottish Parliament. The noble Duke may be interested to know that the commission has received submissions in relation to nuclear power, which is a reserved matter but where the consenting and planning process would be a matter for Scottish Ministers. The commission is considering these representations. If the noble Duke wishes to make representations to the commission in relation to cross-border railways, we will be pleased to look at them.

Lord Adonis: My Lords, I am grateful to the noble Duke for moving the amendment, which gives us a further opportunity to explore the issue of cross-border rail infrastructure. We need to make a distinction between two separate issues here. The first is the issue of services. As my noble and learned friend has just said, where those services are cross-border, my department through the franchising arrangement takes the lead role. The issue at stake in the Planning Bill is not services but infrastructure. The Infrastructure Planning Commission will not have vires in respect of the Scottish part of rail infrastructure proposals which cross the border. That does not mean, however, that the United Kingdom Parliament could not play a role in consenting to such schemes. It would be open to the promoters to seek authorisation by means of a private or possibly hybrid Bill presented to the Westminster Parliament, which would be likely to require a Sewel motion. In seeking consent for such a rail infrastructure scheme across the border, that would be one of two possible ways forward. The other would be for the IPC to consider the English part and for Scottish Ministers to consider the Scottish part.
	Discussion on which of those options would be best would take place at the appropriate time, taking full account of the circumstances of the case. I am certainly not closing the door to the possibility of the United Kingdom Parliament deciding the planning issues relating to those infrastructure projects, but that would be by means of a private or hybrid Bill, requiring a Sewel motion; it would not be done through the IPC which, under the Bill, would not have powers in respect of the rail infrastructure required for cross-border projects. The issue of services is distinctly different. It relates to the contracting process with train operating companies for services which, as the noble Duke said, run from Glasgow, Edinburgh and other Scottish cities to south of the border.

The Duke of Montrose: My Lords, I am interested to hear the response of the Minister, but I am still puzzled. One knows perfectly well that planning is a devolved matter and, as I understand it, would require consideration of specific areas, items, routes or anything else within Scotland. Is it the Minister's contention that national infrastructure is not a reserved matter and that, therefore, it is a proper matter for the Scottish Administration to consider? If so, does that relate only to national infrastructure as regards Scotland? The clauses at the beginning of the Bill apply to Scotland, so I would have thought that the Scots should be able to consider cross-border railways.

Lord Adonis: My Lords, it is our contention that the Scottish dimension of any rail infrastructure projects that cross the border are subject to the devolution settlement and, therefore, should either be decided by Scottish Ministers or, as I said, be subject to a private or hybrid Bill procedure, which, in turn, would require a Sewel motion.

The Duke of Montrose: My Lords, I find it difficult to plough my way through all this, but in the mean time I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 60 [Local impact reports]:

Baroness Hamwee: moved Amendment No. 8:
	Clause 60, page 37, line 14, at end insert—
	"( ) The deadline shall allow reasonable time for the preparation of the local impact report"

Baroness Hamwee: My Lords, Amendment No. 8 is grouped with government Amendment No. 9. They relate to the clause that provides for local impact reports. We support government Amendment No. 9, which takes away the deadline for the deadline—if I can put it that way—for the provision of the local impact report, which will not now be required to be the deadline for completion of the examination. We support the thinking on this, which is to allow the applicant and other parties to ask questions about the local impact report and test it.
	However, it seems to me that there is a danger in leaving the matter open. In preparing the impact report, the local authority might find its time squeezed so that it has insufficient time to do justice to the matter—hence my amendment that the deadline must allow reasonable time for the preparation. I hope that the Minister can give me some assurances on that. Clearly, the commissioner needs to set a realistic timescale proportionate to the size of the task of the local authority. Ideally, there should be agreement between the parties—I use that term in its widest sense—on what is a reasonable time for the preparation of reports. I hope that the noble Baroness can assure me that common sense will apply and that the parties will all act as civilised adults in addressing the issue. I beg to move.

The Earl of Caithness: My Lords, before the Minister moves her amendment, will she advise on how the Government will help local authorities with the preparation of this report? Will there be guidelines so that the reports will be consistent? What steps will be taken to ensure that all major items are included throughout the country on an equal basis, in particular agriculture?

Baroness Andrews: My Lords, I am glad that the noble Baroness welcomes the amendment. I will put on record some of the reasoning behind it and then address the amendment itself. I hope that I can reassure her. It may be useful if I set out why the Bill provides for the commission to invite the relevant local authority, or authorities, to produce a local impact report.
	We are absolutely clear that local authorities, as the democratically elected representatives of the local community, have a vital role to play in the consent regime for major infrastructure, particularly in ensuring that national decision-makers, including the proposed IPC, take proper account of relevant local factors and considerations. Therefore, the Bill provides local authorities with a vital role in representing their communities in the new process and in ensuring that their local communities are adequately consulted. I say to the noble Earl, Lord Caithness, that we will certainly put out guidance and take early action with local authorities to ensure that they understand the process. This is an important question, because so much will rest on their understanding of what this offers their planning procedures.
	Relevant local authorities will be consulted by the promoter of a project before they submit an application under the provisions of Part 5 of the Bill. The IPC must have regard to any report on the adequacy of the promoter's consultation received from a local authority when deciding whether to accept an application. Relevant local authorities will be interested parties to the examination of an application. In addition, Clause 60 requires the IPC, on accepting an application for development consent, to invite the relevant local authority, or authorities, to produce a report on the likely impact on their area of the proposed development being applied for. Clause 104 then requires the commission to have regard to the local impact report when making its decision. Clause 105 requires the Secretary of State to do the same in a case in which she decides, for example, to exercise her power of intervention. This all adds up to the local impact reports being central to the IPC decision. As such, we have sought to give local authorities the longest time to prepare the reports, which will, I envisage, be quite detailed documents. They will reflect the impact of a development on the local development plans; they will reflect what the community feels and thinks.
	However, the importance that the new process gives to local impact reports needs to be balanced against the need to ensure that the applicant and other interested parties are also given a reasonable opportunity to comment on the report to the IPC. We are looking for a balance of fairness and access. On Report, the noble Lord, Lord Berkeley, raised the concern that the Bill does not appear to provide for a local authority's local impact report to be seen and commented on by the applicant and any other interested party before the end of the examination of the application by the IPC. My noble friend's concerns arose from the provision in Clause 60(6), which provides that the deadline for submission of the local impact report is the same as the deadline for the completion of the examination of the application by the IPC. My noble friend made a compelling case and I gave an assurance that I would consider this further ahead of Third Reading, which I have done.
	I accept that provisions in Clause 60(6) may inadvertently suggest that the applicant and other interested parties might not have an opportunity to comment on a local impact report. This was not our intention. Our Amendment No. 9 therefore removes subsection (6) of Clause 60 so that instead it will be for the commission to specify in each case the date by which the local impact report must be received. That will be subject to procedural rules made by the Lord Chancellor under Clause 97, which we expect will clarify that the deadline must give sufficient time for the parties to comment on the local impact report.
	What we have are rules that will strike the right balance between giving local authorities the longest time possible to complete these detailed and important reports and ensuring that the applicant and interested parties are given a reasonable opportunity to see and comment on the report to the IPC before the completion of the examination of the application. I commend the amendment to the House.
	Amendment No. 8, which was tabled by the noble Baroness, Lady Hamwee, would provide that the deadline in Clause 60 should allow reasonable time for the preparation of the local impact report. That is not necessary in the light of what I have said. I set out in some detail that it would be for the commission to specify in each case the date by which the local impact report must be received. That will be subject to procedural rules made by the Lord Chancellor under Clause 97, which, as I said, we expect will clarify that the deadline must give sufficient time for the parties to comment on the local impact report.
	The noble Baroness asked me for reassurance that local authorities will also get reasonable time to comment and complete the local impact reports. I am happy to give her that reassurance because, above all, we will make sure that the procedural rules make it clear that the IPC should give local authorities the longest time possible to complete these reports and ensure that the applicant and the interested parties can see and comment on the report to the IPC. That will be achieved by procedural rules, which is the best way, because it allows for discussion. I hope that the noble Baroness will be satisfied with that.

Baroness Hamwee: My Lords, I asked for an impossible assurance. I do not know that any Minister could give an assurance that people will behave like civilised adults on every occasion. Experience suggests that that ideal is not always achieved. However, I am reassured by what she said, which put the importance of the local impact report well to the fore. What has been arrived at with that assurance and with reference to procedural rules gives the right balance and I am happy to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Andrews: moved Amendment No. 9:
	Clause 60, page 37, line 15, leave out subsection (6)
	On Question, amendment agreed to.
	Clause 104 [Decisions of Panel and Council]:

Baroness Andrews: moved Amendment No. 10:
	Clause 104, page 55, line 19, leave out "the following subsections" and insert "subsections (4) to (8)"

Baroness Andrews: My Lords, we now turn to a small group of amendments to Clauses 104 and 105, which provide how decisions on applications are to be taken by the decision-maker. Government Amendments Nos. 10 and 11 clarify that NPSs that identify a location as suitable or potentially suitable for development do not pre-empt the IPC decision to grant development consent. Amendment No. 12, which was tabled by the noble Baroness, Lady Hamwee, would clarify that the fact that any relevant national policy statement identified a location as suitable or potentially suitable for a particular description of development would not prevent Clause 105(2) from applying where the Secretary of State was the decision-maker.
	As context for these amendments, it is worth restating that the Bill provides a clear framework for decision-making, which, as noble Lords know, consists of the relevant national policy statement and the matters set out in Clauses 104 and 105, including matters to be prescribed in the statutory instrument or instruments that we will lay before Parliament in due course following consultation. Within this framework, the national interest, as developed in the national policy statement, will be the prime consideration for decisions. NPSs will set out our national policy on, and the national need for, infrastructure, but only after they have been consulted on and have been scrutinised by Parliament. As we know, national policy statements will vary in specificity depending on the sector to which they apply. In some cases, the relevant Secretary of State may decide that it makes sense to specify the location where it is considered that it would be appropriate for investment to take place. We have already stated that the NPSs for aviation and nuclear will be location-specific. That will help us to focus the task of the IPC.
	It is important that I set out clearly at this point that NPSs will indicate, as appropriate to the particular infrastructure with which they are concerned, places that are suitable or potentially suitable locations for development. We discussed at earlier stages the difference between site and location. NPSs will not identify specific sites. The developer will bring forward the site application and it will be for the IPC to determine whether it is appropriate. It will be left to the IPC to consider the detail of specific sites, layout, access and, of course, local impacts.
	It is clear from Clause 104 that the NPS will not be the only factor on which the commission's decision is based, because it provides, as we debated on the previous amendment, that the IPC must also have regard to the local impact report from the local authority, other matters that may be set out in secondary legislation and any other matters that the commission thinks are important and relevant. We have made it clear that the commission will be able to take account of a range of other factors in its decision. The Bill requires the commission to take into account any matters that it believes are important and relevant. Where appropriate, it will be able to refuse consent for a development, notwithstanding the fact that the application accords with the relevant NPS.
	Subsections (4) to (6) of Clause 104 provide that the IPC can, in reaching a decision, depart from the national policy statement where not do so would lead the UK to being in breach of its international obligations, would lead the commission to being in breach of any enactment or would be unlawful by virtue of any enactment. That will ensure, for example, that protection of sites under enactments such as the habitats directive is respected in the commission's final decision.
	Clause 104(7) allows the panel or the council to turn down an application that is in accordance with a national policy statement if it is satisfied that the adverse impact of the proposed development would outweigh its benefit. The IPC would still consider issues specific to the application at the local stage—detailed layout and so on—as well as environmental impact. If it decides that the adverse impact of a development would outweigh its benefit, it can refuse consent.
	I have gone through that process for the last time because I wanted to show that the Bill clearly provides that the IPC can reject an application even where it accords with the relevant NPS in the circumstances outlined in subsections (4) to (8) of Clause 104. I make it clear that the provisions of Clause 104 apply to all decisions taken by the commission, whether or not the relevant NPS has identified suitable or potentially suitable locations for development.
	On Report, noble Lords, notably the noble Baroness, Lady Hamwee, sought an assurance that we would reconsider the wording of the Bill to make it clear that the IPC must consider the issues raised as a result of subsections (4) to (8) of Clause 104 in cases where the relevant NPS identifies locations that are suitable or potentially suitable for development. I accept that it is important to be quite clear about that. I assured the noble Baroness on Report that I would consider the point further ahead of Third Reading to see whether clarification in the Bill to that effect would be helpful.
	Government Amendments Nos. 10 and 11 make clear in the Bill that to identify a location as either suitable or potentially suitable for development in an NPS will not pre-empt the IPC's examination of the issues referred to in subsections (4) to (8) of Clause 104. The amendments will clarify that in all cases the IPC must have regard to the other factors provided for in subsections (4) to (8) of Clause 104 and that, if any of the circumstances outlined in those subsections apply, it can reject an application even if it is in accordance with the NPS. I hope that that will satisfy the noble Baroness. I am grateful for her help in enabling us to clarify that point. I beg to move.

Baroness Hamwee: My Lords, I welcome the Government's amendments. Throughout the passage of this Bill, the Minister has devoted time and a considerable degree of care to listening to noble Lords and responding to their concerns wherever possible. As ever, the wording which the Government have produced is considerably better than mine and I thank the Minister for the two amendments. In introducing them, she said quite rightly that there have been occasions when the term "site" has been used. In fact the Bill deals only with "locations". We have all been guilty of referring to "sites". There was even an occasion at the last stage when the Minister talked about "potentially suitable sites". I am glad that that has been corrected and we have slightly broadened the issue.
	Amendment No. 12 reflected my concern that the Secretary of State should be in the same position as the commission in cases where the Secretary of State takes a decision on matters to which he or she must have regard. I appreciate that it will be rare for there to be a national policy statement in place when there is a Secretary-of-State decision, but it is possible and the Bill allows for that. The Government's drafting clearly includes confirmation—and I use that word rather loosely—of the status of the NPS vis-à-vis other considerations. Having had it explained to me that it is in a different part of Clause 104 from those to which the panel and council must have regard, and that those parts of Clause 104 are not repeated in Clause 105, I can see that my concern is misplaced; that concern being that a court looking at the two clauses might say that Parliament had a different view as to how Clause 105 would operate and national policy statements would have a different status in that clause. Third Readings are useful occasions. I can see now that that should not apply. I am grateful for the time of the House and for the opportunity to explain my concern, as well as to thank the Minister and make sure that it is understood how the two clauses operate.

Lord Howarth of Newport: My Lords, for reasons that the whole House understands and accepts, the noble Lord, Lord Reay, chose not to move his Amendment No. 1 about respecting high quality landscape. Is the Minister willing to elaborate a little on what she considers the clause as amended to mean for the duties of the panel and council and the Secretary of State as they arrive at their decisions in relation to respect for the landscape?
	I am happy to see my noble friend Lord Hunt in his place and most grateful to him for his willingness to meet the noble Lord, Lord Reay, and me and for the letter that he has written to us. He said on Report that national policy statements will take account of all relevant government policy, including PPS7, and I appreciate that PPS7 confirms that great weight should be given to the designations of national parks and areas of outstanding natural beauty in planning policies and development control decisions. Can the Minister confirm that PPS7 will be among matters prescribed in subsection (2)(c) of Clause 104 or other matters which the panel and the council may consider important or relevant, as in subsection (2)(d)?
	The major development test set out in paragraph 22 of PPS7 says that major developments should not take place in national parks and areas of outstanding natural beauty except in exceptional circumstances. Will my noble friend tell us a little more about how strong that protection is, and how strong the protection in PPS22 and its companion guide is? Some of us fear that it will be argued, for example, that the need to provide more renewable energy in coming years constitutes an exceptional circumstance, and that adverse effects on the quality of the landscape will be considered to be outweighed by other environmental, social and economic benefits, thus justifying the festooning of our most beautiful and treasured landscapes with wind-power apparatus. Can my noble friend reassure us to any extent on that point, and can she assure us that the forthcoming national policy statement on renewable energy will robustly protect important landscapes?
	I appreciate that local authorities are instructed in PPS7 to take account of landscape quality in preparing local development documents, and that local authorities will be statutory consultees where national policy statements are location-specific, as well as for pre-application and examination processes in the development consent regime, and that they will have the opportunity to provide local impact reports to the IPC. Clause 104 refers to all this. My noble friend said in the debate on a previous amendment that local impact statements will be key.
	Clause 104(4) applies,
	"if the Panel or Council is satisfied that deciding the application in accordance with any relevant national policy statement would lead to the United Kingdom being in breach of any of its international obligations".
	Will my noble friend tell us whether the Government will regard the European Landscape Convention as being among those international obligations, and will she confirm that PPS1 reflects that convention and will be interpreted in that sense? Will she also confirm that the Government will pay very careful heed to the advice of Natural England, as a statutory consultee for all national policy statements? Such reassurances would be helpful, but they would remain somewhat flimsy.
	So, finally, I ask my noble friend for two specific assurances. Will she assure the House—in terms that can be noted by the courts, which will interpret this law in due course—that, as an important environmental consideration, the conservation of the landscape falls within the scope of the Secretary of State's duty to contribute to sustainable development in Clause 10? When, before designating a national policy statement, Ministers carry out an appraisal of its impact on sustainability, will they assess and take account of its impact on the landscape? The noble Lord, Lord Hunt of Kings Heath, gave the noble Lord, Lord Reay, and me such assurances in his letter, but it would be hugely helpful if my noble friend could place those assurances on the record in Hansard.

Baroness Andrews: My Lords, I thank the noble Baroness, Lady Hamwee, for interpreting and speaking to my amendment, which I shall say nothing more about.
	I will answer quite a lot of the questions asked by my noble friend Lord Howarth by referring to the letter which my noble friend Lord Hunt of Kings Heath sent to the noble Lord, Lord Reay, but I will have to write him about others because they were even more detailed than some of the answers that he received. I will do my best not to weary the House by referring to the letter, which answers most of these questions.
	National parks and areas of outstanding natural beauty have the highest status of protection for their landscape and scenic beauty, and great weight indeed should be given to them in planning policies and development control decisions. Of most relevance to this in the context of the Bill is the major development test. This is set out in paragraph 22 of PPS7, which says:
	"Major developments should not take place in these designated areas, except in exceptional circumstances".
	As my noble friend Lord Hunt said on Report, national policy statements will take account of all relevant government policy, which will include PPS7 where it is relevant to that NPS.
	PPS7 recognises non-designated areas of landscape outside nationally designated areas that are particularly highly valued locally. It sets out that local authorities should draft criteria-based policies in local development documents, utilising tools such as landscape character assessment. The noble Lord asked how strong those planning provisions are: they are very strong indeed.
	Specific policies on planning for renewable energy, including on landscape protection, are set out in PPS22, which is supported by a companion guide to provide practice guidance on assessing the visual and landscape effects of planning applications for wind turbines. PPS22 recognises that the landscape and visual effects of particular renewable energy developments will vary on a case-by-case basis according to the type of development, its location and the landscape setting of the proposed development.
	PPS22 advises that in sites with nationally recognised designations, such as sites of special scientific interest, national parks and AONBs, planning permission for renewable energy projects should be granted only where it can be demonstrated that the objectives of designation of the area will not be compromised by the development and any significant adverse effects on the qualities for which the area has been designated are clearly outweighed by the environmental, social and economic benefits. Small-scale developments should be permitted within these areas provided that there is no significant environmental detriment to the area concerned. We intend that there will be an NPS for renewable energy, which will be drawn up and consulted on in due course.
	The noble Lord asked me about the European Landscape Convention, which has been mentioned several times during the passage of this Bill. As my noble friend said on Report, the Government believe that the UK is already fulfilling the requirements of the convention; therefore, it does not have any immediate implications for the planning system in England. National planning policies, including PPS1: Delivering Sustainable Development, recognise the need to provide appropriate protection and enhancement of rural and urban landscapes in England, in line with the principal aims of the convention.
	The noble Lord mentioned Natural England. Defra has asked Natural England to take the lead on the implementation of the ELC in England, working closely with English Heritage and others. I should like to underline that Natural England will be a statutory consultee for all NPSs and will be able to raise those issues that it feels are appropriate, including any arising from the ELC.
	The Bill also requires that, before designating a national policy statement, Ministers must carry out an appraisal of their sustainability. That will assess the impact of the NPS on the landscape and other environmental issues, and ensure that they are taken into account. As with Clause 10, it will capture not just environmental but also economic and social impacts, which will ensure that we understand the impact of NPSs holistically as we seek to deliver our sustainable development objectives.
	The Government agree that high quality landscape is important and should be protected. They have put policies in place to that effect, and NPSs will take account of all relevant government policy. Local authorities will be able to report to the IPC on the impact of specific proposals. The noble Lord asked about regulations under Clause 104(2)(c) in relation to PPS7. I will write to him on that, but I can tell him that a number of provisions on protecting landscape will be incorporated into NPSs. With that reply and with the promise of reading Hansard tomorrow and picking up on any detailed questions that I did not address, I hope that the noble Lord will be content.

Lord Chorley: My Lords, before the noble Baroness sits down, is she aware that what she has just said is enormously important to a whole range of organisations covering different aspects of landscape protection? Many people out there in the countryside will be very grateful.

On Question, amendment agreed to.

Baroness Andrews: moved Amendment No. 11:
	Clause 104, page 55, line 36, at end insert—
	"(9) For the avoidance of doubt, the fact that any relevant national policy statement identifies a location as suitable (or potentially suitable) for a particular description of development does not prevent one or more of subsections (4) to (8) from applying."
	On Question, amendment agreed to.
	Clause 105 [Decisions of Secretary of State]:
	[Amendment No. 12 not moved.]

Baroness Andrews: moved Amendment No. 13:
	After Clause 138, insert the following new Clause—
	"Common land and rights of common
	(1) An order granting development consent may not include provision the effect of which is to exclude or modify the application of a provision of or made under the Commons Act 2006, except in accordance with section 131 or 132.
	(2) For the purposes of section 38(6)(a) of the Commons Act 2006, works carried out under a power conferred by an order granting development consent are not to be taken to be carried out under a power conferred by or under an enactment, except in a case to which section 131 or 132 applies.
	(3) An order granting development consent may not authorise the suspension of, or extinguishment or interference with, registered rights of common, except in accordance with section 131 or 132.
	(4) "Registered rights of common" means rights of common registered under—
	(a) the Commons Act 2006, or(b) the Commons Registration Act 1965."

Baroness Andrews: My Lords, I shall speak also to government Amendment No. 30. These amendments result from the issue raised by the noble Lord, Lord Greaves, on common land. We had short debates in Committee and on Report, and I hope that our amendment answers the point raised by the noble Lord, Lord Greaves, and others.
	As I mentioned on Report, we share certain core principles about how land registered as a common should continue to benefit from the protections of the Commons Act 2006, and this has two aspects. First, we continue to believe that a promoter should not be able to conduct development works on common land without consent. Secondly, where development of a nationally significant infrastructure project does take place on a common, that land should be deregistered as a common and replacement common land should generally be provided. Our amendments ensure that these points are covered.
	Subsection (2) of the new clause confirms that consent will still be needed under Section 38 of the Commons Act where development consent orders grant authority for works on common land, except where the order authorises compulsory purchase under Clauses 131 and 132 of this Bill. If a promoter already owns the common land in question and does not wish to seek consent under Section 38 of the Commons Act, he will have to apply for deregistration of the land as common land under Sections 14 and 16 of the Commons Act, in which case the requirement to provide replacement land will still usually apply. Subsections (1) and (3) confirm that no development consent order could override these principles unless that order authorises the compulsory acquisition of the common land in question, again under Clauses 131 and 132. The reason for this exception is that the procedure set out in these two clauses will generally require the replacement of the common land. In the case of compulsory acquisition, the development consent order will trigger deregistration automatically because it would be considered a relevant instrument for the purposes of Section 14(3)(c) of the Commons Act. Government Amendment No. 30 is a consequential amendment to the extent clause so that the extent of the new clause on commons covers England and Wales only.
	I hope that the noble Lord will be reassured that the points he raised in earlier debates are good ones, and that I always enjoy agreeing with him. It is right to ensure that no loophole exists in the Bill to allow promoters to skirt around the protections in place for the precious notion of common land. I beg to move.

Lord Greaves: My Lords, I thank the Minister for the amendments. She said that she hopes that I will be reassured by them. I am far more than reassured. I first raised this issue in Committee and moved amendments on Report in the hope that a satisfactory compromise could be reached. I have to say that a satisfactory compromise has not been reached because as far as I can see, the amendments now being proposed by the Minister do everything I had hoped and intended my amendments to do. It is a very good show and I thank the Minister for listening, for understanding the issue and for responding to it. If the Minister enjoys agreeing with me, I enjoy it far more when she brings forward amendments that do exactly what I have been asking for.

On Question, amendment agreed to.

Baroness Andrews: moved Amendment No. 14:
	After Clause 181, insert the following new Clause—
	"Good design
	In section 39 of PCPA 2004 (sustainable development) after subsection (2) insert—
	"(2A) For the purposes of subsection (2) the person or body must (in particular) have regard to the desirability of achieving good design.""

Baroness Andrews: My Lords, I suspect that this amendment will give the House even greater pleasure than did the amendment regarding common land, which is hard to believe. It concerns design in the town and country planning system. It inserts into Section 39 of the Planning and Compulsory Purchase Act 2004 a requirement that those exercising development plan functions in England, whether regional or local, must have regard to the desirability of achieving good design when pursuing the objective of contributing to the achievement of sustainable development; similarly it applies to those exercising development plan functions in Wales in regard to the Wales spatial plan or local development plan.
	Noble Lords who have sat through our debates on the Bill, from its optimistic beginnings, through the heavy pounding of Committee, as the noble Earl, Lord Caithness, described it, to the calmer waters of Report, will know that design has come up continually. I thank noble Lords for the nature of the debate we have had; it has been an important debate, and we have listened. There is no dispute that ensuring good quality design is an important component of sustainable development. We have already introduced a duty for the Secretary of State to have regard to the desirability of achieving good design in seeking to achieve sustainable development when exercising functions in relation to national policy statements for nationally significant infrastructure, and new Clause 14 does the same with respect to development plan functions.
	We have made clear how design contributes to sustainable development in Planning Policy Statement 1, an important and generous statement, and other policy statements, from the broad juxtaposition of buildings and facilities to orientation on site and contribution to streetscape. The provision will also complement and reinforce the new climate change duties we have introduced in respect of development plans. Good design can help reduce carbon emissions and encourage more sustainable behaviour such as walking or cycling. Noble Lords will know that local planning authorities already have to take account of our existing national design policies in development plans and make clear local policies where they add to national policy guidance.
	What pleases me about the amendment is that the measure we are introducing will raise the profile of what planning authorities should be doing. Development plans play a key role in guiding users of the planning system. We are therefore keen to see these documents completed as soon as possible—I am glad to say that we are making good progress—and we would not want to see the new design duty delaying the process. However, we will want to consult and discuss with local planning authorities how to give effect now to the design duty in the context of plan-making. I indicated on Report that our chief planner would be writing to all local planning authorities shortly to encourage them to take further positive action to achieve good design, and we will be considering what further support can be given to them and others in delivering good design—for example, through design panels, the HCA and other partnerships.
	I have indicated to the House that we are committed to achieving good design and to supporting local planning authorities and others through strong partnership programmes. I believe that the new clause represents a proper and proportionate response to the excellent and thorough debates that we have had at all stages in the Lords thus far, and I hope noble Lords agree. I pay particular tribute to my two noble friends Lady Whitaker and Lord Howarth for their relentless capacity for not giving up. Credit is due to them and to all who supported the amendments.
	Amendment No. 31, regarding Clause 24, is consequential to Amendment No. 14 and relates to the commencement of that provision. It provides that the provision on design will be commenced by order made by the Secretary of State in relation to England, and by Welsh Ministers in relation to Wales.

Baroness Whitaker: My Lords, I congratulate my noble friend on this amendment. I thank her for the exemplary way in which she has kept the House informed of developments in the Bill, and for her kind words. My noble friend Lord Howarth of Newport said on Report that she could take her place in history and that she could open the way to a new and better era of architecture and design in Britain.
	The amendment completes a legal framework that will enable our talented architects and designers to give of their best for ordinary affordable social housing as well as for big infrastructure projects. We shall have a better society because of it if we make sure that all concerned take full advantage of the new duty to achieve sustainability by good design. The first crucial step would be taken by these amendments, and I applaud my noble friend's achievement in getting them through.

Lord Tyler: My Lords, I add a word of congratulation to the noble Baroness, Lady Whitaker, and the noble Lord, Lord Howarth, on how they have pursued this. Of course, our main congratulations go to the Minister.
	I hope that I will not be thought to be a little niggardly in saying that, in contrast to the response on the issue of the commons law last week, when the Minister was very positive and said that she would look at it quickly and come back with proposals, as indeed she has—I and commons campaigners in other parts of the country respect and are delighted by that—she was a bit negative on this issue last week. Looking at Hansard, on Report, she was uncharacteristically truculent on design, even suggesting that it was quite impossible to put something in the Bill because there was no time to consult.
	I pay tribute to the Minister for the speed with which she and her team in the department have managed to come up with something in the Bill that meets many of our concerns. As a relative newcomer to your Lordships' House—I have been here only three and half years; until you have been here 33 years you are not regarded as a native—I have seen how the Minister and her team have responded with meticulous efficiency to issues in the House, and by correspondence with many of us involved in the passage of the Bill. That is in sharp contrast to my experience on the Front Bench in the other place over 14 years, when Ministers did not think it necessary to explain and persuade. That is to the credit of this House, and to the Minister and her team.
	The elegant U-turn that the Minister has undertaken over the past few days is to her personal credit and that of her team in the department. The result is a great step forward. I say to her and to other Members of your Lordships' House who have made this such an important part of our discussions on planning that it is a pity that we did not have this requirement clearly in previous legislation—notably the Planning and Compulsory Purchase Act 2004, to which it has now been added. It is a great step forward, and I am sure that it will be recognised as such outwith this House.

Lord Howarth of Newport: My Lords, my noble friend has indeed allowed the hand of history to touch her shoulder. When it was suggested on Report last week that that might be so, she blushed modestly and demurred. Since then, however, she has embraced her historical destiny to become the reformer responsible for the institution of legal requirements that will raise standards of design across the entire planning system, and in regeneration and building.
	The new clause and this legislation will be timely. The Government are extremely anxious to accelerate construction activity, and house-building in particular, for good reason. We understand that there are 1.7 million households on the waiting-list for social housing. It is widely agreed that a stimulus is needed for the economy under the present conditions. However, there is a danger that, in our haste to accelerate construction, quality is sacrificed. We must not repeat the disastrous mistakes that were made decade after decade in the second half of the 20th century. With a great deal of public-sector activism and expenditure, and a depressed private sector and—I hope not, but perhaps—a depressed social housing sector operating in circumstances of great difficulty, there is a danger that we will revert to the policy of creating estates, with all that word's bad connotations, instead of continuing to create integrated communities. That is an aspect of design.
	There is a continuum between economic policy, social policy, planning policy, functionality, sustainability, building regulations, green spaces, design and aesthetics. All are interdependent. My noble friend has been right to reject the view that it would have been inappropriate to state the requirement for design alongside the requirement for sustainable development in this legislation. Good planning, plus good design, plus good building tend to make for good communities.
	Where questions of style are concerned it does not matter whether a development is modern or traditional. I personally do not think that is any business of government, but it is government's business to help everybody involved in design and construction in this country to raise their game. How is that to be done? It is not easy. We have a plethora of planning policy statements and DCLG and CABE manuals of design. There is a mass of local policies in every planning authority on shop fronts, fenestration materials and so forth. So why, then, is good design not widely prevalent? Part of the answer is that knowledge and judgment are hard won. We need to do better on education and training. While the Government should always respect professional and academic autonomy, I hope that they will lend all their weight and drive to improving education and training in this field.
	However, I think that the main problem arises from pressures imposed on planning committees, for example, by house-building targets, the need to create new infrastructure fast, local campaigns to stop things being done and from developers who want to cut costs and improve their profit margins. Planning officers and members of planning committees often lack the time to go into the necessary detail. They sometimes lack the interest and the knowledge, too, but they mainly lack the time. The agenda for a fortnightly planning committee meeting can easily run to 100 pages and more, so that the advice from the Government, CABE and the local community is paraphrased by planning officers for the working papers of the committee and too much is lost in translation. The detail in such matters as scale, massing, texture and grain, as well as the more obvious issues such as access and parking, is crucial if you are to achieve good design.
	If we do not want identikit new developments spread all across the country, we must also foster the vernacular. However, by definition the vernacular is diverse and needs to be interpreted locally by local people who are knowledgeable about it. That means that we need to think about how to use the resources that local advisory committees can offer to local planners. That is one of the reasons I am such a strong believer in design review. One interesting model for advice lies in conservation area advisory committees.

Lord Dixon-Smith: My Lords, I always enjoy listening to the noble Lord but I remind him that this is Third Reading.

Lord Howarth of Newport: My Lords, of all the noble Lords who might upbraid me I am perhaps happiest being upbraided by the noble Lord, Lord Dixon-Smith. I will simply confine myself to noting that we have an anomalous situation in which conservation area advisory committees were set up in statute but are not statutory consultees. That is a wasted opportunity. We should better use these advisory bodies, design review and other advisory bodies of this kind. However, this amendment to the town and country planning regime, together with the amendments which my noble friend previously brought forward, strengthens our drive for good design and strengthens the duty to have regard to design on the HCA and in the development consent regime. I am deeply grateful to my noble friend and I ask her whether she will now turn her creative mind to how this new and good law can be made to work well.

Baroness Hamwee: My Lords, I hope that the noble Baroness will forgive me if I do not spend time focusing on her place in history because I could not do so better than the noble Lord has done. Instead, I wish to make one observation about the proposed new clause, which we support. It is important to recognise that the sustainable development duty is not diluted but that good design is a mechanism for achieving sustainable development. I would hate it to be thought—I do not believe that any noble Lords think this—that somehow we have created a new hierarchy within sustainable development. I do not read that as being inherent in the new clause. We support the notion of sustainable development but not that of spreading it more thinly or changing it.

On Question, amendment agreed to.
	Clause 208 [Liability: interpretation of key terms]:

Lord Dixon-Smith: moved Amendment No. 15:
	Clause 208, page 120, line 35, after "building" insert "excluding buildings housing infrastructure"

Lord Dixon-Smith: My Lords, the fact that the amendment has survived to be discussed at Third Reading seems to indicate that this has been, and proves still to be, a very complex subject: whether infrastructure should be eligible or liable to pay the infrastructure planning levy. Like others, I pay tribute to the noble Baroness for the work that she has done to clarify matters, and the detail that she has gone into. Her last missive to me was sent at 10.50 pm yesterday, which indicates how hard she and her team have been working.
	I am not sure that we are much further down the road of defining the limits and liabilities of CIL. I apologise to the noble Baroness for this, but we now have in the Bill, as a result of an amendment that we slipped in at the end of Report stage, when we were all suffering from exhaustion and perhaps not thinking as clearly as we might have been, a provision under Clause 208(2) that CIL regulations may provide for,
	"works or changes in use of a specified kind not to be treated as development",
	and,
	"the creation of, or anything done to or in respect of, a structure of a specified kind to be treated as development".
	The interpretation of those phrases is wide open and I ask the noble Baroness if she could explain how that would work in practice. I apologise to her and the House for this, but one does not realise until one starts to work on what one is going to say what the points are that should be made.
	There is a difference in principle between the noble Baroness and myself. She has argued consistently that infrastructure generates employment and employment generates infrastructure liabilities. It is a chicken-and-egg argument and I put it the other way round: it is the fact that people in communities require services that generates the need for infrastructure. In her missive last night, the Minister gave two examples, one of a power station and the other of an airport extension. I acknowledge that both have clear infrastructure implications. However, the chicken-and-egg argument applies. Are those developments the cause of the population, or the result of the population? I argue that, if they are the result of the population, the payment of CIL is not appropriate. That said, I acknowledge that, in life, we all spend a great deal of money paying tax that goes to do things that help us: the money goes round, and this is another part of the roundabout.
	The question on which I would like clarification concerns projects of that nature that are subject also to Section 106 agreements, which at the moment are the only way of getting infrastructure projects into a development. Developers, and indeed local authorities undertaking negotiations prior to granting planning permission, both have in mind a sum of money.
	With the introduction of the infrastructure levy, we are pre-empting a part of that negotiation—we have to realise that—and to the extent that that is so, the flexibility of those negotiations will be diminished. It really was to try and determine, or get some increase clarity on, what that relationship is that I felt moved one last time to table an amendment to see whether I could persuade the Minister to explain exactly how they will work together.
	My feeling is clear; these clauses were designed in a different age, and now it seems to me that their purpose, for a few years at any rate, is seriously redundant. I urge the noble Baroness not to be in a great hurry to introduce this, although we normally plead for regulations of this sort in a Bill. All that will do is transfer the responsibility for deciding whether to introduce the infrastructure levy from the Government to the local authorities. It would be better if the whole thing were in abeyance until the country's construction industry is sufficiently robust and active again, when we could begin to consider the charges in a sensible light. Even Section 106, to which it is entirely accustomed, is going to be very difficult to negotiate at present on any major development. I beg to move.

The Earl of Caithness: My Lords, this is the only amendment on CIL, and I support my noble friend in what he said. It gives me the only opportunity to ask the Minister a couple of questions about CIL. I am certainly not happy with the way that the Bill is at the moment, or with the way CIL is. We have no regulations, which we were promised in another place, we have no information on which we would have been able to discuss the matter and at each stage there have been a substantial number of government amendments. This is an ill-conceived policy.
	The Minister said on Report that CIL is very much a general charge. If a local authority is looking at funding infrastructure, it has to work out what percentage can come from other areas and what percentage can come from CIL. Given what the Minister said on Report, how is she going to prevent a local authority transferring CIL into other pockets of money? If a local authority is looking at CIL as a general charge rather than as a specific charge for a development, it will be wide open for it to transfer CIL money into other areas of the local authority. Can she explain how that will be prevented and how local authorities will stop that?
	I have one other question. As the Government have refused to remove the Planning-gain Supplement (Preparations) Act from the statute book, confidence in the Government among the construction community and surveyors is at rock bottom. They do not trust the Government on this. If the Government spend any money under the PGS Act, can the noble Baroness give a categoric assurance that a Minister will make a Statement in both Houses that money is going to be so spent? There is great fear, despite what she said on Report, that her department sees CIL as a short-term measure and really it wants to go back to the planning gain supplement. Will the noble Baroness confirm that a Statement will be made in both Houses before any money is spent?

Lord Woolmer of Leeds: My Lords, I declare an interest as a partner in a business that works in the development area. The noble Lord, Lord Dixon-Smith, raises a reasonable point. It would be helpful if the Minister could remind the House where in the impact assessment documents there is an estimate of the amount to be raised from CIL in the first five years and whether that takes account of the inevitable effect that it will replace Section 106 money. In almost all cases, I find it difficult to conceive of a situation where a developer will continue to pay Section 106 money as well as CIL.
	In the impact assessment for the Planning Bill, there are no figures in relation to CIL. It might well be that I have been negligent in not reading every document that one could have read in preparation for this Bill, but I cannot remember them. However, it would be a great pity if, for all this effort, the result was a bit of a damp squib and that, on balance, the amount raised from CIL was modest. Certainly the outlook for the next few years in the development business is that it will be a tough time.

Baroness Hamwee: My Lords, grouped with this amendment is Amendment No. 26 in the name of my noble friend Lord Bradshaw, who has just entered the Chamber. The timing is immaculate. However, to allow him to get to his place, perhaps I may say that the noble Lord, Lord Berkeley, took up the question of what is meant by the phrase "roads and other" in the line,
	"roads and other transport facilities",
	in the definition of "infrastructure"—not so much what is meant by it but why it is necessary. I felt at the time that the noble Lord had a good point, but it was late at night and we were all finding it a bit difficult to articulate things. I believe it was suggested that it would be answered in writing. I do not think that I have seen a response to that. I may have missed it, in which case I apologise, but I have no doubt that the Minister has an answer now and it would be a shame if she did not have an opportunity to give it.

Lord Harris of Haringey: My Lords, I declare an interest as a vice-president of the Local Government Association and the Association of Police Authorities. I intervene at this late stage in this Bill with some trepidation, partly because I spent 26 years as an elected member of local and regional government trying to avoid ever having anything to do with planning decisions, but more particularly, because I have not previously successfully intervened in these debates. Having twice put down amendments at Committee and on Report, I thought it was inappropriate, having not been available to move them on those occasions, to put them down at Third Reading.
	However, Amendment No. 26, which we are considering in this group, gives me the opportunity to make a point. I am grateful to the Minister for arranging for me to meet officials on the question of why there is actually quite a long list of items of infrastructure in Clause 215, yet policing and emergency services are missed out. If I understand the argument that was put to me, I was told that the list was not intended to be exhaustive, but merely to set the boundaries of the sorts of things that might be included in the term "infrastructure". If things such as emergency services, policing and fire services and so on were included that might turn it into an exhaustive list, which it is not.
	I am concerned that we will end up with a dog's breakfast in Clause 215. We will have a list of items which will include some things and not others. It will include so many things that it might no longer be said to be just giving a few vague examples of things that might be deemed to be infrastructure for these purposes. It will end up providing a list. There is already evidence that local authorities are looking at it and saying that its implication is that those items included specifically in Clause 215 are what is really meant by infrastructure and those should be the priority in any community infrastructure levy.
	I hope that, in responding to Amendment No. 26 and the group, my noble friend will therefore make it clear that the list is not exhaustive and that she will give us a few more examples of what might be included, for the benefit of local authorities. Obviously, railways and airports—they have been discussed at previous stages of the Bill—could be included, but it should also be clear that the list includes policing and emergency services. I hope that she will be able to say that, because it is without question that many large developments require additional investments in policing and emergency services. The evidence is that large developments often bring with them increases in crime, and that there are issues about police response times and how you make sure that the development combats crime and disorder.
	Interestingly, the recent PPS12 advised that the core strategy within a local planning authority area should be prescriptive in terms of certain infrastructure requirements. It then listed a number of areas that should be identified as part of that process, including everything listed in Clause 215(2) and—it was the only "and"—the police. For some reason, when the list turns up in Clause 215(2), policing and emergency services are missed out. I hope that my noble friend will understand why there is concern about that strange list and that, in her response, she will clarify once and for all not only that the list is not exhaustive but that policing and emergency services—and, of course, railways—should be included.

Lord Bradshaw: My Lords, I apologise for my sudden arrival. The points were made perfectly adequately both by my noble friend and from the Minister's side of the House. Simply, the list should not be focused on one thing; it should include all the infrastructure requirements of a local authority.

Baroness Andrews: My Lords, I am sure that the noble Lord, Lord Dixon-Smith, feels perfectly justified in bringing the amendment back at Third Reading, as we have had a wider debate—a collective debate on several separate issues. I applaud his tenacity in bringing forward his concerns. He and I disagree about the issue—as he described it, the chicken and egg. I will address the amendment before I come on to questions raised by other noble Lords.
	It should be noted that the amendment presents two clear and perverse opportunities to avoid paying CIL, which I am sure is not something that the noble Lord wants. First, there are no specified limits on the minimal amount of infrastructure that a building must house if it is not to become liable for CIL. That is because "infrastructure" in the amendment is not tied to the CIL definition of "infrastructure" in Clause 215. In the context of the amendment, "infrastructure" could have its ordinary meaning and cover things such as pipes. Therefore, it could exclude large numbers of new buildings on the grounds that they contain pipes, ducts or electric cables. Secondly, by providing that only new buildings housing infrastructure will be exempt from paying CIL, rather than allowing for changes to existing buildings housing infrastructure, the amendment risks distorting the behaviour of developers, who might seek to disguise changes to existing buildings as entirely new buildings housing infrastructure and thus not liable to pay.
	We cannot support the amendment. However, I am aware that, in our conversations about the nature of infrastructure and its impact, the noble Lord made it clear that the amendment on Report was probing and directed at finding what was and was not included in the definition of development liable to pay CIL. On the basis of the question that he raised about the text of the Bill, I think that that is still his intent. To answer the question, I will have to expand the argument a little.
	Noble Lords are aware that the purpose of CIL is to raise funds to provide infrastructure to support the development of an area. CIL is intended to spread costs of providing such infrastructure more fairly. I remind noble Lords that only 14 per cent of developments contribute to Section 106. As noble Lords will recall, there is a principle of fairness behind the logic. Infrastructure generates impact and costs. I take the point about chicken and egg but I do believe there is an ethical argument that it should contribute to the costs of local and sub-regional infrastructure given these impacts. I give two examples: schools generate huge amounts of road traffic and hospitals generate huge amounts of clinical and other waste. These are demands that those infrastructures can place on other infrastructures. That is why we believe that infrastructure should contribute to those needs because otherwise other development will have to pay higher rates of CIL in the generalised assessment to cover those costs.
	We have limited the notion of infrastructure. We principally sought to delineate liability in relation to buildings, because buildings by their nature are places where people congregate or travel to and from and they represent the sort of developments that local authorities plan for when considering their infrastructure needs. I know that this is not an entirely straightforward concept—there are powers in Clause 208(2)(a) to deal with difficult cases—but the word "buildings" should be interpreted in its ordinary sense. If you look at the Concise Oxford English Dictionary, you see that "building" is,
	"a permanent fixed structure forming an enclosure and providing protection from the elements etc (e.g. a house, school, factory, or stable)".
	Given the impact that such buildings have on local infrastructure, we are right to explore in regulations whether they might contribute to these infrastructure costs through paying CIL.
	We have always said that exemption from CIL is a matter for regulations. We have not ruled out that there could be an exemption from CIL for infrastructure in addition to what is not covered because it is not a building—we have had some interesting exchanges on wind turbines, for example. However, we do not want to rule things out now on the face of the Bill before we have consulted on them. Any exemptions from CIL need to meet the criteria that we set out in paragraph 4.10 of the August document. I hope that the noble Lord will take some comfort from that.
	We have to think about things such as warehouses. These have a major impact on transport infrastructure, although in these cases the charging authority might decide to charge different rates of CIL for such developments because they have a different level of impact. On that basis, railway stations and harbour buildings would also be CIL-liable whereas structures such as railway lines and power lines would not. I appreciate that there is a power in Clause 208(2)(b) to cover other structures, but our intention in making regulations would be to cover those structures that are similar to buildings because they might place demands on infrastructure or benefit from it.
	As we indicated in our August document on CIL, we also intend that some development that might otherwise fall under Clause 208(1) will not be liable to pay CIL. Household developments by home owners are one such example. We also intend to exclude many developments for which planning permission is granted under the GPDO because such development is likely to have minimal impact on local infrastructure.
	These are complex issues. We have struggled with them at each stage of the Bill. We are pledged to continue to work closely with stakeholders on which development should be liable to pay CIL and which should not. We will certainly consult on the detail.
	The noble Lord asked about Section 106. We are very aware of the short-term problems in the housing market. The way in which CIL will be assessed will be driven by the development document, which will be a separate document alongside the development plan. It will take into account the various sources that can help to fund the needs that additional housing in particular will make on the local community. Section 106 and CIL will have to be assessed side by side along with the contribution that central government make. As we work through the transition and CIL comes on stream, Section 106 may be scaled back to cover fewer things. We want to discuss that with stakeholders. I know that the Benches opposite have urged caution on Section 106, so we will certainly consult on that.
	I turn to the question raised by the noble Earl, Lord Caithness. On the Planning-gain Supplement (Preparations) Act 2007, the Minister for Local Government in the other place gave such a commitment, so I hope that that will satisfy him. His second point was about how we will prevent CIL from leaking into the other coffers of local government. As I said, there will be a development plan document. CIL will be extremely specific and will go through a rigorous and transparent process, for the reasons that we have discussed as we have gone through the Bill. However, it will be ring-fenced in general terms and it must be applied to infrastructure. The Bill says:
	"CIL regulations must require the authority that charges CIL to apply it ... to funding infrastructure".
	I hope that that will reassure the noble Earl.
	My noble friend raised a question about the police. Having been fully prepared at two previous stages of the Bill when he was not able to be in his place, I do not now have the speaking notes with me. I believe that he was asking for reassurances, which I can give him. We are certain that the list is indicative. We are also certain that police infrastructure can receive CIL funding. Guidance will be used to remove any doubt, if doubt remains. Of course, we will have the regulations, on which we shall be able to consult. I hope that that reassures him.
	My other noble friend asked how much will be raised by CIL. As soon as we get Royal Assent, we shall be putting out a new impact statement, which will update the figures. I think that we will see that CIL is expected to generate hundreds of millions of pounds.

Lord Woolmer of Leeds: My Lords, I asked two specific questions. Where in the documents before the House is there an estimate of revenues to be raised—that is, before the figures are revised—and do those estimates take account of the certain reduction in Section 106 contributions that are made to local authorities? I appreciate that those contributions are made by a small proportion of developers, but they relate to the major developments and the figures will be substantial. It would be helpful to me, if not to the House as a whole, to have a feel for the amounts expected to be raised and the amount of offset from Section 106. Those are important matters, which I am sure were carefully considered before the proposal was brought forward.

Baroness Andrews: My Lords, probably the best that I can offer my noble friend at the moment is a quotation from the August document, although I can send him the detail. Paragraph 4 of that document states:
	"The Government is already investing substantial additional funds to support housing growth and economic development. CIL will also provide further new resources. Estimates as to how much CIL will raise are heavily dependent on the number of local authorities that elect to charge CIL, and the rates that they charge. However, CIL is expected initially to raise hundreds of millions of pounds of extra funding per year towards the infrastructure that local communities need. While CIL will make a significant contribution to infrastructure provision, core public funding will continue to bear the main burden, and local authorities will need to utilise CIL alongside other funding streams to deliver infrastructure plans locally".
	I cannot answer the specific question on the RIA as I do not have a copy and so cannot give the noble Lord a paragraph number. I will write to him and build on that. I hope that I have addressed all the questions that were raised. I shall make sure that I write if I have not.

Lord Dixon-Smith: My Lords, the Minister has, as always, been generous with her time and done her best to answer the questions. The people who will have to interpret everything that has been said, both in this Chamber and in another place, are those who, ultimately, will sit down to draft the regulations. Although I am in no hurry to see them, I look forward to them with considerable interest, to see how those people manage to interpret everything that has been said on this subject. I am grateful to the Minister.

Baroness Andrews: My Lords, before the noble Lord sits down, may I put a correction on the record? In answering my noble friend, I should have said "police stations", meaning the buildings, rather than "police". I wanted to make that absolutely clear and I apologise to the noble Lord for interrupting.

Lord Dixon-Smith: My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 209 [Charities]:

Lord Shutt of Greetland: moved Amendment No. 16:
	Clause 209, page 121, line 27, leave out paragraph (b)

Lord Shutt of Greetland: My Lords, we now come to the subject of charities, linked with the word "clarity". Before I move on to the substance of the amendments tabled in my name, I express my gratitude to the Minister for her exemplary dealings with Members of the House, not only in the written word but in meetings. Since we last discussed this Bill, I have received 29 pages from the Minister and we have had a couple of meetings. That is a good way of doing business. I hope to return here tomorrow to talk about the Dormant Bank and Building Society Accounts Bill, which has been dormant now for 10 months. I have not had as much as a picture postcard from Her Majesty's Treasury, but that is another matter.
	In moving Amendment No. 16, I shall speak to Amendments Nos. 18, 20 and 24. There are three deletions and one addition. I bear in mind what the noble Lord, Lord Dixon-Smith, said earlier about this being Third Reading, so I will not go into great detail about the splendour of the charitable sector, save to say this. Unlike the state or local government, the charitable sector seems able to get round it. The charitable sector has supporters' clubs of serious magnitude in the people who are prepared to back it. Not only that, but the charitable sector finds itself, from time to time, the repository for gifts, whether of shares, cash or, indeed, land. Therefore, it is a sector in which people have great confidence.
	Amendment No. 16 would move towards greater clarity. The deletions would leave us with regulations that provide for exemptions from CIL, for persons who would otherwise be liable, where the development is a relevant charity. If one deleted the items that, in my view, should come out, CIL would not apply when the charity wanted to develop for its own purposes or if it wanted to develop and recycle the proceeds for its own charitable purposes. Amendment No. 24 would give that opportunity to areas that may not yet be seen as charitable or be classed as charities under the Charities Act, such as community enterprises or community sports clubs. With these changes, it would be clear that charities were exempt and that there were opportunities for work that is seen by many members of the public as similar to charitable work to be exempt or, in certain circumstances and depending on the regulations, to have some degree of reduction.
	I do not want to be bobbing up and down, so I shall speak also to the other amendments in this group. The effect of the amendments tabled by the noble Lords, Lord Cameron and Lord Hodgson, and the right reverend Prelate the Bishop of Southwell and Nottingham is similar to that of my amendments. Deleting "may" and inserting "must" and changing subsection (3) would be very helpful. If it comes to the point, I will be happy to support them.
	Amendments Nos. 22 and 23, tabled by the Minister, change subsection (3). The language is strange, but I believe that it is meant to clarify. Regardless of what happens to my amendments and those tabled by the noble Lord, Lord Cameron, it will be important for the Minister to talk about clarity. I know that she will want to speak about the improper use of a charity. I do not believe that any noble Lord would want to see charities used in an improper way. Any regulations will need to take care of anybody who is up to no good and is trying to use a charity in an improper way. The Minister will also want to speak about state aid, although I am far from clear whether that is real or imagined.
	If today two charities are each given £10 million, the first in stocks and shares and the second in land, and in five years' time they sell, for the first there will be no capital gains tax and for the second, with today's law, there will be no CIL. Yet there is the prospect of CIL. It is important to be clear about where we are on that. It is particularly important that the Minister sets out how she sees the position on investment property and whether CIL applies. It will be helpful to hear what the Minister has to say. I beg to move.

Lord Brabazon of Tara: My Lords, I should point out that if this amendment is agreed to, I shall not be able to call Amendment No. 17.

Lord Cameron of Dillington: My Lords, I shall speak to my three amendments in this group. I have no wish to repeat the arguments that I set out in previous stages of the Bill. It has been proven again and again that charities deliver public benefit, including benefit that comes within the definition of community infrastructure, at far better value that any public administration can, usually because of the voluntary input of labour and the localised nature of many charities. The idea of raising money in any form from charities to be spent by the public sector is a negative benefit for society. For the Treasury to be shy about giving a total exemption for charities is short-sighted.
	My second general point is that the charitable sector is already very heavily regulated, with no room for manoeuvre for charities outside their charitable purposes and with every aspect of their business having to be explained to and audited by the Charity Commission. I cannot believe that there is any room for underhand dealings—certainly nothing that any extra regulation or control can do to make a ha'p'orth of difference in this field, apart from causing all charities, especially the very small ones, unnecessary extra costs in the form of lawyers and accountants to comply with an extra layer of unnecessary regulation.
	Lastly, before turning to our amendments, as we have progressed through the Bill's stages and watched the Government's prevarication on the simple question of a clear—I mean clear—exemption for charities in the Bill, I have become more certain that under no circumstances should we leave anything to chance in the form of secondary regulations in which, subject to Amendment No. 27, this House will play no part.
	I do not say that in any way as an attack on the noble Baroness, because I know that she has been working very hard on our behalf with the powers that be. I add my praise to her to that which has already come from other Members of the House for her general ability throughout the Bill to listen to what the House has had to say, to amend and to reach an accommodation with the views expressed from all quarters of this House. As has already been said, she deserves her place in history. That does not undermine my point about the general government prevarication in getting exemption for charities into the Bill.
	On Amendment No. 19, in conversation with the Bill team, I discussed the restrictive nature of subsection (1)(b), referred to by the noble Lord, Lord Shutt: the difference between charities that may own investments as opposed to property. When I explained my dismay at the change of tack that seemed to be taking place compared to other tax exemptions and the disadvantage that charities that owned property would have in this case, I was told that my concerns could be catered for under subsection (2)(a). I immediately jumped on the word "could" because, at the moment, that is all that subsection (2)(a) promises. Actually, it promises endless hours of expensive individual negotiations—hence the rationale behind Amendment No. 19. I add in passing that even with the amendments tabled to subsection (3), the regulators are still left with a huge degree of flexibility regarding subsection (2) charities, even if "may" is turned to "must" with reference to subsection (2).
	On Amendment No. 21, at Report, we were pushing for a total withdrawal of subsection (3), because as it stands it undermines the certainty that we sought in both subsection (1) and subsection (2). However, following the response of the noble Baroness on Wednesday and her subsequent letters, we are prepared to agree a compromise and to allow subsection (3) to refer to subsection (2) only, but not subsection (1) charities, as defined in subsection (4). That is our bottom line. It is a good compromise between our position and the Government's position. Even with the new government amendment, subsection (3) as proposed seems for the first time to bring conditionality into charity legislation. As I said, we can understand why DCLG wants to impose conditions on institutions to be exempted under subsection (2), especially Scots, Northern Irish and EU charities, because their charity law is different from that of England and Wales, but under statute and common law in England, a charity is a charity is a charity.
	We certainly do not want any additional test of public good or public benefit beyond that already set out in the Charities Act 2006, especially if that test is being set by people who are either from central government, in the form of the regulators, or from local government, in the form of local authorities—people who are without experience in the sector. I believe that would be totally invidious. Charities in England are already regulated by charity law, company law, Her Majesty's Revenue and Customs in respect of tax, and also the common law of trust. Subsection (3) appears to impose another layer of regulation on a sector that is already incredibly heavily regulated. I am sure there are ways of cheating the system but they are frankly fairly unlikely. I do not believe another set of rules is going to change that. If a subsection (1) charity develops property, it is impossible to extract any profit from that charity as all dispositions of land, where there is a change of purpose for that land, have to go to the Charity Commission for clearance. The Charity Commission audits the transaction and follows the money.
	The Minister has said she is worried that any concession in this area might engage the EU state aid rules. She has argued that subsection (3) is there not just as an anti-avoidance provision but because of state aids. We can see why that might be needed for subsection (2) but not for subsection (1). Charities cannot normally trade except where it is primary purpose trading so the state aid rules are much less likely to be applicable because there is unlikely to be any cross-border distortion of competition between suppliers of a service which is undertaken as a primary purpose of a charity. As I have said many times before, and we have consulted various top lawyers on this, we regard this state-aid distraction as little more than UK gold-plating.
	Amendment No. 25 follows on logically from Amendment No. 21 and the acceptance of one, with or without a vote, implies acceptance of the other. Amendment No. 25 is really only a clarifying drafting point. The department admits that subsection (5) is only intended to apply to institutions exempted under subsection (2). Some lawyers have claimed that the semi-colon in the middle could be interpreted as indicating that the second half refers to both subsections (1) and (2). Our amendment merely removes all element of doubt. It is clarifying and also it succeeds or fails along with Amendment No. 21.
	Finally, I repeat that the acceptance of our Amendment No. 21 is the bottom line for the charity sector. There is enormous support, inside and outside both ends of the Palace of Westminster, for unequivocal exemption for registered charities. The longer certain parts of the Government have prevaricated on this Bill, the more convinced I have become that we need our Amendment No. 21.

Lord Hodgson of Astley Abbotts: My Lords, I add my thanks to the Minister for the trouble she has taken, the letters she has written and the way she has tried to reach a solution on this rather tricky issue. In her letter she refers to the question of "purpose" or "purposes" which we discussed last time. She wrote to us to explain that "purpose" or "purposes" in her letter was the same under the Interpretation Act. It might be helpful if she could say that on the Floor of the House this evening. While many people will undoubtedly read her letter, more people will read the proceedings of this House in Hansard, so if she could say it again, that would be extraordinarily helpful.
	I have a great deal of sympathy with Amendment No. 16 tabled by the noble Lord, Lord Shutt. As he graphically pointed out, it is discriminatory against charities which happen to have ended up with their assets in land as opposed to in investments on the stock market. The Government have concerns about a windfall from development. It seems strange that you could get a windfall from a takeover on the stock market and be liable to no tax but on the other hand, as the noble Lord, Lord Shutt, pointed out, you could be CIL-able in terms of a land holding. Charities tend to be quite rich in land because schools and care homes will have land. Therefore, there will tend to be discrimination against them and against people who seek to leave property to charity in the future.
	I take slight issue with the Minister's officials about one aspect of the letter. In our previous debate, I referred to the fact that Section 36 of the Charities Act 1993 contained an anti-avoidance provision. I felt that it underlined the reasons why Amendment No. 16, in the name of the noble Lord, Lord Shutt, was worth pursuing. Her officials describe this as a reasonably undemanding requirement on the charity and what it can do. It is worth pointing out that the Act requires that, if there is a connected party, the disposition must go to the Charity Commission, whatever happens. In any case, the trustees have to,
	"obtain and consider a written report on the proposed disposition from a qualified surveyor instructed by the trustees and acting exclusively for the charity"—
	and—
	"advertise the proposed disposition for such period and in such manner as the surveyor has advised".
	Having considered the surveyor's report, they must consider,
	"that the terms on which the disposition is proposed to be made are the best that can reasonably be obtained for the charity".
	There follows a definition of who the qualified surveyor must be.
	It is not fair for the Minister and her officials to say that these are reasonably undemanding requirements, as they force the charity to consider very carefully what they are doing and to take appropriate advice. If the charity fails to do that, the charitable resources requirement requires the Charity Commission to ensure that charitable resources are being used properly. One therefore wonders whether the Government have the appropriate confidence in the Charity Commission to carry out this task. I understand why they wish to leave this to the regulations. Indeed, the Minister says that draft regulations will be published in the spring and that they will listen carefully to the views of the sector, but this is the heart of the difficulty; we will have passed the Bill before the regulations come out. Moreover, the regulations are not amendable and will not come to this House, so it really is good night from us tonight on the detail of this part of the Bill.
	The issue of changing "may" to "must" has been detailed by the noble Lord, Lord Cameron. It simply does not make sense for officials to write letters saying that this would be otiose and would lead to unworkable results, with duties that were impossible to fulfil. It would be helpful when the Minister winds up if she could give us some real-life examples of why this would be so.
	On our Amendment No. 21, the noble Lord, Lord Shutt, has a rather more draconian, scorched earth approach in that he wants to blast the whole thing out of the way, but I think that we need to make the change that the noble Lord, Lord Cameron, has outlined: no ifs, no buts, no maybes. There are very clear controls on the way in which the clause will operate: you have to be a relevant charity, so there is no question of you being able to sneak into this; and, unless the Minister accepts Amendment No. 16, in the name of the noble Lord, Lord Shutt, there will be regulations, which can be drawn up in such a way that they are anti-avoidance measures. We therefore do not need to think of a further, final failsafe in an anti-avoidance provision. I very much hope that the Minister will see that Amendment No. 21—and Amendment No. 25, which would ensure that the clause applies only to subsection (2)—is absolutely critical to maintain the confidence that the charitable sector should have in the way in which the Government propose to apply CIL to charities.

The Lord Bishop of Southwell and Nottingham: My Lords, I, like other noble Lords, am most grateful to the Minister for the enormous energy that she has put into striving for the best possible legislation; she is probably conscious that she is nearing sainthood in this House. My name is attached to Amendments Nos. 19, 21 and 25, and I support what the noble Lords, Lord Shutt, Lord Cameron and Lord Hodgson, have said. I do not want to detain the House by repeating arguments or by trying to embellish them in any way. I would simply appeal to the Minister and the House to strive to produce crisp, clear-cut and unambiguous legislation, which is unencumbered with unnecessary compliance or regulatory complexity, so that the whole of the charitable sector can get on with its valuable work for the public good and for the public benefit, and so that scarce resources do not have to be diverted into overcoming a plethora of new, complex hurdles. Like other noble Lords, I, too, wait expectantly for the Minister's reply.

Lord Best: My Lords, I have two short speeches to make in quick succession on these amendments. The charities most affected by the possibility of paying the community infrastructure levy are the housing associations, which are building tens of thousands of homes on which this new levy would be charged over and over again. We have reached a point where it is clear that those housing associations that are charities will be excluded and will not have to pay CIL. In all normal circumstances, Clause 209 will cut them out, which is extremely good news and very positive.
	The housing associations divide between the 70 per cent that are charities and the remainder that are not charities because, usually for slightly obscure historical reasons, they decided not to register as charities. I had responsibility for helping such organisations to register between 1968 and 1988, which gave me 20 years of looking at the constitutions of those different organisations. About 30 per cent of them are housing co-operatives or organisations that are industrial and provident societies without charitable status. Even though they make up only 30 per cent of housing associations, they make up about 50 per cent of the total housing association output. If they are not also excluded we will run into all kinds of anomalies. When one looks at the two types of organisation side by side, it is hard to be sure which is and which is not a charity.
	It is my hope that the Minister will place on record some of the very helpful comments that she made to us in a letter. She expressed the view that she hopes it will be possible, after consultation with the National Housing Federation and others, to find the regulations to ensure that those organisations that do not happen to be charities but are also providing this much needed affordable housing are included in the same exemption from CIL.
	I am hoping to hear—again, it is a matter of saying this on the Floor of the House, which is important to those in the world outside—that it is the Government's intention that all housing associations that are making the same provision of social housing for the same kind of people will be placed in the same position for CIL, which I hope is a fairly straightforward statement. Otherwise, we will have half the production line of affordable housing by these organisations disadvantaged and confused. All kinds of anomalies will creep in as to which kind of organisation a builder or a local authority wants to work with. It would be immensely helpful if we could have clarity regarding the Government's intention to place all housing associations on the same footing if they are doing exactly the same job with the same subsidies and the same governmental support.
	My second speech relates to the amendment specifically about charities. I have followed the ebb and flow of this debate very closely and with a good deal of interest. Obviously, we must recognise that the Minister has already—perhaps she has not been given a sainthood for this part of the Bill—moved a long way towards putting in the Bill the fact that there will be a 100 per cent non-negotiable exemption for charities in all normal circumstances. That is the effect of the way in which the Bill is phrased. However, she has reserved unto government the fact that in regulations there will be the opportunity in exceptional circumstances to say "no" to that overarching 100 per cent general exemption. It would not be like rate relief which, for example, is 80 per cent relief or VAT which is 0 per cent relief. As someone who runs charities, I know that we have to pay some taxes, such as VAT.
	I turn to those that have invested in land. I ran the Joseph Rowntree Housing Trust for many years and we had a portfolio that included land that will go for future development. Indeed, the trust still owns such land. I was musing on the point that an investment by charities in land should be treated in the same way as an investment in stocks and shares; that is, if they are sold, no capital gains tax is payable. But if land is held for investment, when it is sold, the charity would not pay CIL at that point; it would be payable further down the line by the housebuilder who purchases the land. However, it would not be payable if the purchaser was a charitable housing association. Therefore, this would affect only indirectly the investment of the Rowntree foundation and others holding land for investment purposes. I absolutely take the point.
	The question for us, having put into the Bill a 100 per cent exemption in normal circumstances, is whether we can be given sufficient reassurance about the exceptions to those normal circumstances in which the Government reserve the right to say no. I chair the Giving Forum which looks at ways in which giving and donations can be increased. We have promoting, for example, the idea of lifetime legacies, ways of giving during someone's lifetime but still getting some benefit. I have come up against the staunch resistance of the Treasury to measures that might be abused by clever lawyers using obscure charity law to benefit individuals or companies. Tedious as it is, I have come to recognise that it is possible for avoidance measures to creep in to such schemes.
	On state aid and the European dimension, I am afraid that I have no understanding of why that is an inhibition at all, but I appreciate that the Treasury has its own lawyers who will put up a very hard fight to ensure that there is in regulations a safety net for the Government that provides that although in normal circumstances there will be a 100 per cent exemption, the Government can reserve the right in some perhaps obscure situations nevertheless to call in the CIL exemption. We are not going to get past that because the government lawyers are going to be fairly adamant. That seems to be a pretty solid brick wall. We can take a rush at it, although possibly the rush would go a bit too far with the amendments tabled by the noble Lord, Lord Shutt. However, those tabled by my noble friend Lord Cameron of Dillington, the noble Lord, Lord Hodgson of Astley Abbotts, and the right reverend Prelate the Bishop of Southwell and Nottingham, do not. I hope that we can be given sufficient reassurance not to have to push this too hard. I have a great deal more sympathy with those amendments rather than seeking to go at this head on. I hope, too, that the Minister can give us a few more words of comfort before we take the next steps on this.

Baroness Ford: My Lords, I want to intervene to say a few words about the state aid legislation. I have enjoyed our thoughtful debates on this at each stage of the Bill and I pay tribute to my friend for the journey she has made and the willingness she has shown in trying to encompass all the genuine points made on the charities aspect.
	I want to say in particular to the noble Lord, Lord Cameron, that I do not think that we can simply disregard state aid. I do not accept that what the Government are trying to do here is somehow to "gold plate"—I believe that was the expression he used—this part of the regulations. Over 25 years, I have found that the most vexatious and time-consuming work is creating structures for real estate and for regeneration which avoid charitable and non-profit-making organisations from falling into the trap of state aid. I have to say to the House that of all the areas I have been involved in, this is one in which the European Union has tremendous expertise and, I have to say, incredibly long tentacles in terms of its reach into such projects. The Union is very proficient at understanding how to realise value from these and when state aid is in fact being granted. It took me two and a half years to secure claims for the English Cities Fund in a way that did not contravene state aid rules. It is immensely sophisticated in its application of state aid, and at our peril would we take lightly the advice coming from the Minister on this point.

Lord Geddes: My Lords, I apologise to the House for intervening on this important Bill only at this late stage of Third Reading, but I have continued reservations on this charitable question. I strongly support Amendments Nos. 19, 21 and 25.
	I shall speak briefly on those in a moment, but I have a problem with government Amendment No. 22. I much prefer Amendment No. 20 in the name of the noble Lord, Lord Shutt. If Amendment No. 22 is carried, I do not, in my ignorance, see how it makes sense. Unless I have completely misinterpreted it, Clause 209(3) would then read:
	"Regulations under subsection (1) or (2) may provide that an exemption or reduction does not apply if specified conditions are satisfied".
	That appears to be a contradiction in terms, although I may be quite wrong on this. I do not like the clause, but it would make more sense if it read, "reduction does not apply unless specified", and so on. Perhaps the officials could scribble a memo or two to the Minister to clarify that.
	I return to the other amendments. In Amendment No. 19—the "must/may" argument—I found it incongruous that subsection (1) has "must" while subsection (2) has only "may". On Amendment No. 21 I can do no better than support what my noble friend Lord Hodgson has said, while Amendment No. 25 is to an extent consequential on Amendment No. 21. I urge the Minister to look again at the whole question of charitable status, particularly for those who are building and renovating buildings that are themselves in the charitable sector.

Lord Livsey of Talgarth: My Lords, I shall comment on Amendment No.16 and others tabled by my noble friend Lord Shutt. I am involved in 15 charities and voluntary bodies, which are declared in the Register of Lords' Interests. There is no question that the ability of these charities to survive is very tenuous in some cases, while others are doing exceptionally well. The ones I am associated with that I have great concerns about are environmental charities, which often own property and land and which provide a superb service, not only for country dwellers but also for those in metropolitan areas. They would be captured in the net as the Bill is currently phrased. The amendments would provide a lifeline to many charities by ensuring that they were not unfairly penalised.

Baroness Whitaker: My Lords, I was puzzled by many of these amendments. I am involved in a number of charities, as is evident from the Register of Lords' Interests. The noble Lord's amendment to Clause 209 does not seem reasonable. It would be unreasonable to fetter the Executive as tightly as some of these amendments would oblige. It may be that noble Lords opposite do not contemplate being in government and that were they to be so they might take a different view.
	I was much persuaded by the remarks of the noble Lord, Lord Best. He was talking, of course, about exemptions for charities. Speaking generally, the term "charity" covers a wide range of undertakings, and the activities of charitable institutions are also very varied—the charity owned by Northern Rock had some curious aspects.
	Some charitable trusts put up buildings that have significant infrastructure implications; for example, a big art gallery in a city centre. Such trusts are economic undertakings when they charge to make a return on investments and to create additional funds. We are party to treaty obligations not to create unfair competition through state aid, with penalties, including for the charities, if we do. I live not far from the piers of the south-east coast, which could be a case in point. There is a real difference between what non-government Members may suggest and what Governments can actually do. I hope we do not accept constraints that would be quite unsuitable.

Baroness Andrews: My Lords, I have had the hand of history as well as comparisons to a vision of sainthood offered to me this afternoon. I am extremely grateful for all the kind things that have been said across the House. I pay tribute to my officials for an extraordinary job of work. The issues raised by the amendment have taxed us all.
	On the other hand, of course, I have been accused of prevarication and obscuration. I wish that I had gone through the Charities Act 2006 with noble Lords. I suspect that, having been here for the passage of that Act, which was pretty heavy going, I would have understood many things that I have had to learn quickly in the past few days. I understand why the noble Lord, Lord Shutt, and the right reverend Prelate call for clarity. We are trying to make things as unambiguous as possible in legislation, so that we can have certainty about outcome and impact. That is absolutely the right thing to do.
	Sometimes, however, clarity comes at the expense of risk. Things are complex. The problem with the third sector, as the noble Baroness, Lady Whitaker, pointed out, is that it is hugely diverse and complex in terms of what it does, charities' objectives, how they work, their relationships, their economic arrangements with trading funds and so on. We are incredibly privileged to have this sector, but it is by no means simple. In all my dealings with noble Lords over the past few weeks, discussing these amendments with the Charity Tax Group, listening to debates and so on, I am reminded time and again how complex these areas are and how vital it is to be careful about what we are doing. Underlying everything I say this evening is a deep desire to do what is right and safe for the third sector, and to make absolutely sure that what we have will be as fully protective and enabling as possible.
	I know that noble Lords originally had a number of concerns about Clause 209 and how we will use the powers it gives us to help charities in the important work that they do. I shall address those first. I think that noble Lords have now received the letter that was sent by email at 11 pm last night. I am sorry that it was not sent earlier, but it was complex to draft. It might be helpful if I quickly run through the purposes behind the various components of Clause 209 again.
	The heart of the clause is subsection (1) and the guarantee which it represents; that is, that CIL regulations must include a 100 per cent exemption from CIL where the liable party is a,
	"relevant charity in England and Wales",
	and the development is to be used wholly or mainly for its charitable purposes. The noble Lord, Lord Best, spelt that out in his contribution. A relevant charity in this context is defined in subsection (4) as any charity registered with the Charity Commission or which is excepted or exempt from the duty to register with the Charity Commission. It is not just about registered charities. The subsection covers many scenarios: a lifeboat station developed for use by the RNLI, for example, or a hostel which would be used by a homelessness charity. It would also apply to a building only to be used as a head office for a charity.
	The noble Lord, Lord Shutt, was talking about land on this point. However, CIL becomes liable only if there is development on it. It is extremely important to recognise that when charities buy and sell land alone, CIL is not directly engaged. Charities are in fact asked for Section 106 contributions, reflecting that their developments have impacts. We are looking at whether Section 106 could be scaled back so that charities might benefit from that. That is the reality.
	I shall plough on. Not all types of charitable body will fall within the scope of subsection (1) and, in addition, some charities and charitable bodies may perform development, perhaps for investment purposes, which may not constitute using a building for charitable purposes, to which the 100 per cent exemption in subsection (1) is tied. We certainly want to explore providing as wide a range of relief as is legally and practically possible in regulations.
	One noble Lord—I am sorry that I do not know who—talked about "regulations by chance". There will be nothing chancy about these regulations. The Charity Tax Group is committed to working with us assiduously on this, as it has done so far. I have no doubt that it will be as tough and comprehensive as it needs to be.
	Because we want as wide a range of relief as is legally and practically possible, subsection (2) provides a power for regulations to go further than the duty imposed in subsection (1). It does this in two ways. First, subsection (2)(a) provides a power in CIL regulations to provide an exemption to institutions established for charitable purposes which fall outside the coverage of subsection (1). We have expanded the scope of the clause precisely to enable us to help more charities. For example, this would allow us to cover those in Scotland and Northern Ireland, and, if appropriate, other EU charities where they wished to develop in England and Wales.
	Secondly, subsection (2)(b) empowers CIL regulations to require charging authorities to make arrangements for an exemption or reduction to CIL to institutions established for charitable purposes. This will allow us to comply with EU law when giving relief, and, expanding the clause, allows us to explore providing exemptions or reductions for charities which are engaging in fundraising activities which fall outside the scope of subsection (1)—for example, where land is developed for investment purposes. I will come to investment activity, as the noble Lord, Lord Shutt, invited me to do, because there are some complex issues. They require serious discussion and further exploration with interested parties such as the Charity Tax Group.
	I reassure noble Lords who are concerned that subsection (5) may be used to cut back the range of charities that may enjoy the 100 per cent exemption in subsection (1) that this is not legally possible. We cannot do that. This subsection applies only to the powers in subsection (2) and cannot be applied to the duty in subsection (1).
	We introduced subsection (3) in an amendment on Report. The original subsection stipulated that regulations may provide that an exemption or reduction under subsections (1) and (2),
	"applies only if specified conditions are satisfied".
	That caused noble Lords concern, which I understand. I gave assurances on Report that we could not lawfully use the powers to render the duty in subsection (1) meaningless or hollow. There was a feeling, which I regret, that somehow that qualification would render subsection (1) null and void. It does not, and would not have. I therefore undertook to take away the amendment tabled by the noble Lord, Lord Cameron, seeking to delete the subsection.
	It has been put to us that this subsection does not provide sufficient comfort to the charities that regulations implementing this subsection will reflect our broad policy aims. It seems to presume non-exemption with unspecified conditions. That was the problem with the original drafting. We came back with Amendment No. 22, which amends subsection (3) so that regulations can provide that an exemption does not apply if certain conditions are satisfied.
	I understand that this is not elegant, but we have had to be deliberate in our drafting. As we have amended this clause, it will convey the message to charities that being exempt where a development is used for the charitable purposes of the charity will be the usual situation, as the noble Lord, Lord Best, said. Where very specific conditions are satisfied, however, an exemption may not apply. I shall come to those conditions in a moment.
	It is symbolic that we are approaching the giving of exemptions to charities as being our presumption. There is now a presumption as regards exemptions. I should also make it plain that we are not intending to use this power to find some general way out—I should feel deeply insulted if anyone thought that we were—of providing an exemption of the sort required under subsection (1). It is for exceptional circumstances. Far from intending to be harmful, subsection (3) is intended to help because it will allow us to work with the sector to decide what sort of conditions should feature in regulations. I have spoken to many of your Lordships over the past few weeks and they will know that the two conditions we particularly will apply to subsections (1) and (2) concern anti-avoidance and compliance with state aid law. We are talking about risk. That is why the relevant amendment was tabled.
	As regards the anti-avoidance measure, it is important that regulations have powers to outline anti-avoidance measures. It is not without parallel. For example, Schedule 8 to the Finance Act 2003 stipulates the condition to the relief for charities from stamp duty land tax. It states that,
	"the transaction must not have not been entered into for the purpose of avoiding tax under this Part (whether by the purchaser or any other person)".
	I am aware of the argument about bureaucracy and imposing another layer of regulation. I know that noble Lords are unwilling to countenance what they see as further regulation in a heavily regulated sector, but the charitable sector is heavily regulated because there is a lot of public interest and public money at stake. Private money is also involved. It is a hugely complicated financial sector which has to be regulated in the way that it is. However, subsection (3) does not automatically impose further regulation. It is a starting point for discussions with the sector and other stakeholders on what conditions relating to anti-avoidance might look like. I assure noble Lords, not least with the Better Regulation Task Force in mind, that avoiding unnecessary duplication of existing regulation will be uppermost in our minds during this process.
	As regards Europe, I was very grateful for the contribution of the noble Baroness, Lady Ford, because few people know about what she referred to as the long tentacles of Europe, and the sharp eyes. I believe that we are absolutely right not to take any risks, however remote people feel they may be. It is vital that regulations can protect the charity sector from a breach of state aid rules, the penalties for which are serious and could involve charities having to repay relief, with interest. I understand that some noble Lords are sceptical about this issue but we cannot afford to ignore the risk of this happening. Again, this is an issue which has been brought up in other regimes giving charitable exemptions. For business rates, the guidance on rate reliefs for charities and other non-profit making organisations published by a former incarnation of my department in 2002 brings this issue to the attention of local authorities and sets out how they should respond where a state aid is given under this regime. This is not a distraction, as a noble Lord said. The European Commission rules on state aid state:
	"Aid must have a potential effect on competition and trade between Member States. It is sufficient if it can be shown that the beneficiary is involved in an economic activity and that he operates in a market in which there is trade between Member States. The nature of the beneficiary is not relevant in this context (even a non-profit organisation can engage in economic activities)".
	The European Commission takes a very wide, purposive approach to EU law in practice. Therefore, we are trying to be careful, to anticipate, to use foresight and to use evidence as the basis of our judgment.
	Our view is that state aid law can be engaged even where a development is to be used for a charitable purpose since charities can be engaged in an economic activity, be in competition with other undertakings and are engaged in an activity where there is trade between member states. Building houses in England and Wales and selling them on is an economic activity which many companies from across Europe engage in.
	Government Amendment No. 23 is a purely technical change. Currently, Clause 209(4)(b) applies only to institutions registered in the register of charities kept by the Charity Commission under Section 3 of the Charities Act 1993. However, as a consequence of the commencement of Section 9 of the Charities Act 2006, the register will be kept under Section 3A of the 1993 Act. This amendment therefore amends Clause 209(4)(b) to cater for this change when it comes into force.
	This has been an iterative process, and, as far as we have been able, we have taken on board the concerns of noble Lords at every stage of the Bill's passage. Beginning with only the general power to make exemptions in Clause 221(1)(c), we have, at every step, attempted to provide greater detail, and indeed a duty on the sort of exemption which would be offered to charities. We have listened to what Peers and those in the charity sector have told us and acted appropriately. I believe that the provision we now have, as modified by these government amendments, delivers the reassurance which the sector seeks.
	The noble Lord, Lord Hodgson of Astley Abbotts, invited me to put on the record the point about the definition of "charitable purposes". I reassure all noble Lords that, legally, references to a charitable purpose implicitly include the plural "charitable purposes". Section 6(c) of the Interpretation Act 1978 provides that, in any Act, words in the singular include the plural. I say to the noble Lord, Lord Best, that I wish I could give him as simple an assertion as he wants with regard to his question. He understands the complexities of this sector far better than I do, particularly as regards the housing sector and the range of social housing providers, including those in the private sector, and the diversity of development schemes. A single approach cannot be provided because we must avoid unintended consequences. I can certainly promise him that the Government will seek to work with the sector to explore the possibility of achieving our goal of a relief for charitable providers of social housing through the powers provided by Clause 209 to make provision for charities and institutions established for charitable purposes. However, where there may be providers of social housing whose developments we cannot make provision for through those powers, the Government will—as I made clear on Report—explore arrangements for differential rates for social housing development, which would mean that they would be liable to a significantly reduced rate of CIL. The use of powers to impose differential rates to significantly reduce CIL charges could extend to benefit all providers of social housing and help ensure wider and continued provision of affordable housing. So to the extent that the charitable exemption cannot be used to assist a certain social housing provider, we will be exploring how we can provide support through another route.
	I distinguish between the amendments tabled by the noble Lord, Lord Shutt, which, as the noble Lord, Lord Hodgson, said, would drive a coach and horses through the clause, and the more moderate exemptions asked for by the noble Lord, Lord Cameron, in his amendments. Originally, the noble Lord, Lord Shutt, wanted to wipe out subsection (3) altogether. Now he wishes to keep it but detach it from subsection (1).
	I wish to speak to government Amendments Nos. 22 and 23 and then address the other amendments. These amendments make three key changes to Clause 209. First, they include development activity which is not for the charitable purposes of the charity in the duty in subsection (1). Secondly, they limit or even prevent conditions applying to exemptions given under subsections (1) and (2) and finally they clarify the boundaries between subsections (1) and (2). Opposition Amendments Nos. 16, 18, 19 and 24 are all concerned with placing a duty on the Secretary of State to provide exemptions from CIL.
	Opposition Amendment No. 16 would delete subsection (1)(b), so the Secretary of State would be under a duty to provide 100 per cent exemption from CIL, regardless of whether the development was to be used for the charitable purposes of the charity. Presumably as a result of this change, the noble Lord, Lord Shutt, has deleted subsection (2) to Amendment No. 18 and replaced it with a similar provision to Amendment No. 24. This would allow CIL regulations to enable institutions other than charities to be exempted from CIL under the duties of section 1, and would require charging authorities to provide exemptions from, or reductions in, liability to pay CIL. Crucially, it would not allow regulations to remove certain kinds of charitable institutions from the purview of the clause. We believe that this is an important safeguard, for example in trying to cover charities from outside England and Wales, for the reasons I explained.
	Opposition Amendment No. 19 would put a duty on the Secretary of State to provide exemptions from CIL for institutions established for a charitable purpose, and to require charging authorities to provide an exemption or reduction from CIL. I understand that its primary aim is to compel us to use subsection (2) to exempt charitable investment activity from CIL. However, it would also render otiose subsection (1) and lead to duplication of duties, and could also lead to unworkable results with competing duties.
	I am aware of many concerns about development by charities that is not for the charitable purpose, and the fact that it will not be covered by the 100 per cent exemption under subsection (1). We have powers under subsection (2) to provide exemptions or reductions for charities in CIL regulations. These have been specifically taken so that we can build on subsection (1) to do more to help charities, but they need to remain discretionary; "may" rather than "must". I assure noble Lords that our aim in principle is to exempt development by charities for investment purposes. Now we must explore these complex issues in detail, inside and outside government, to set out a final position in regulations.
	Unlike development for charitable purposes, development for investment purposes brings into play a much wider and more sensitive range of activities, not all of which we believe should be covered by CIL exemption. Furthermore, development of land for sale by charities has the potential to bring the sector into competition with private sector activity of a similar nature. Perhaps this is the example that the noble Lord, Lord Hodgson, was looking for: the development of market housing, or a retail outlet. It may therefore involve state aid issues. Some of these developments can be very large. Deciding whether investment by charities should be covered by exemptions or reductions is a matter not for the Bill but for regulations when we have sufficient time to explore the issue thoroughly with the charity sector. We will publish our draft regulations in the spring and will work closely with the charity sector, as we have done with the development industry over other proposals.
	Opposition Amendments Nos. 20 and 21 seek to blunt the effect of subsection (3). Amendment No. 20 seeks to delete subsection (3) entirely. Amendment No. 21 prevents subsection (3) from specifying conditions under which the duties of Section 1 would apply. I hope that I have persuaded noble Lords that subsection (3), as it would be amended by Amendment No. 22, cannot be changed any further: it is a starting point for discussions with the charities sector on the conditions that might apply, particularly in relation to state aid and anti-avoidance. If my own amendment is accepted, subsection (3) would be worded in a way that symbolises that, in terms of duty, this clause provides as our starting point a presumption of exemption.
	Finally, opposition Amendment No. 25 seeks to amend subsection (5) to make it clear that the powers contained in subsection (5),
	"but CIL regulations may provide for an institution of a specified kind to be or not to be treated as an institution established for a charitable purpose",
	apply only in relation to subsection (2). This is an unfounded concern, as the whole of subsection (5) can only define the institutions that can be given exemptions or reductions under subsection (2). It has no bearing on the 100 per cent exemption from CIL for charities under subsection (1).
	I have gone into some detail: I hope I have not wearied the House. I was challenged to be clear and set out what may be a minority position. I have done my best to show that what we are trying to do is not perverse or stubborn; it is to be as careful as we can in a situation where we cannot predict the future. The fact that we have not been challenged does not mean that we will not have to deal with this issue in future. I would be the last person to put the charitable sector at risk. I hope that the House will accept my amendments and reject the others.

Lord Shutt of Greetland: My Lords, I thank noble Lords who have taken part in this lengthy debate of more than an hour. I will make one comment on the specific point of the noble Lord, Lord Best. My Amendment No. 24 exactly covers the example that he gave of the housing association that is not a charity.
	I started out by saying that I wanted "clarity with charity" and I return to that theme. I do not know whether I am being portrayed as an extremist: I prefer "purist". The interesting thing is that there is no difference between what I am proposing for what happens to land that is built upon by a charity, either for itself or for a charitable purpose, and what happens now. What is now being proposed will make things more difficult and complex. I have sympathy for the Minister, because she has a poor brief and a poor hand. It took her 26 minutes to try to explain this to us: it is very difficult. The noble Lord, Lord Hodgson, used the word "CIL-able". I would alter that to "CIL-ability". I do not think, after 26 minutes, that anybody can say what the CIL-ability is of any specific development. That is the problem with the Bill. It is all going to be, "Let's hope we get something in the spring in regulations". The aim today is to get clarity for charity. Therefore, I wish to test the opinion of the House.

On Question, Whether the said Motion (No. 16) shall be agreed to?
	Their Lordships divided: Contents, 79; Not-Contents, 157.

Resolved in the negative, and Motion disagreed to accordingly.
	[Amendments Nos. 17 to 20 not moved.]

Lord Cameron of Dillington: moved Amendment No. 21:
	Clause 209, page 121, line 39, leave out "(1) or"

Lord Cameron of Dillington: My Lords, I took the amendment proposed by the noble Lord, Lord Shutt, which we have just voted on, as being the front-line position and perhaps even as being in no man's land between the opposing forces, as it were. I still believe that Amendment No. 21 and the subsequent Amendment No. 25 are a reasonable last-ditch defensive position for registered charities, bearing in mind that we in this House will have no control over the regulations when they come in.
	I should like to comment on the remarks made by the noble Baronesses, Lady Ford and Lady Whitaker, on state aid. I have made these points before, although I have not made them today. Charities in this country are exempt from income tax and they are exempt from capital gains tax, which are huge sums of money hundredfold times greater than the exemption that we are trying to get today. Stamp duty land tax recently gave a full exemption for charities, and I cannot understand why the Government have changed their mind on this particular levy. Council tax has an 80 per cent exemption, and most local authorities give the other 20 per cent. Virtually every other country in Europe, with the notable exception of Sweden, gives roughly similar exemptions to its charities. I do not believe the EU Commission would be politically so insensitive or bring down on its head the wrath of all the charities in Europe, and all those who support them—which may amount to as much as 50 per cent of the population—by attacking such a small exemption from what is only a local levy, when it has long ignored all the other much larger exemptions. With that in mind, I beg leave to test the opinion of the House.

On Question, Whether the said amendment (No. 21) shall be agreed to?
	Their Lordships divided: Contents, 89; Not-Contents, 138.

Resolved in the negative, and amendment disagreed to accordingly.

Baroness Andrews: moved Amendments Nos. 22 and 23:
	Clause 209, page 121, line 40, leave out "applies only" and insert "does not apply"
	Clause 209, page 121, line 46, leave out "register" and insert "be registered in the register kept"
	On Question, amendments agreed to.
	[Amendments Nos. 24 and 25 not moved.]
	Clause 215 [Application]:
	[Amendment No. 26 not moved.]
	Clause 221 [Regulations and orders: general]:

Lord Jenkin of Roding: moved Amendment No. 27:
	Clause 221, page 130, line 26, at end insert ", and
	(c) shall not be made unless, before approval by the House of Commons, a period of 60 days has elapsed, beginning with the day on which the regulations were laid.
	(3) During the period of 60 days—
	(a) either House of Parliament may—(i) debate, or pass a resolution relating to, the regulations, or(ii) refer the regulations to any committee for a report; and(b) the Secretary of State must respond to any such debate or resolution or to any such report of a committee before the House of Commons gives its approval to the regulations under this section."

Lord Jenkin of Roding: My Lords, last week noble Lords divided on an amendment that would have given both Houses of Parliament, in our bicameral legislature, the power to approve the regulations to be made under Part 11—the CIL regulations, which the House has just debated. The Bill seeks to restrict the power to another place. As a number of noble Lords said in the debate that has just ended, the whole business of CIL depends on regulations. The word "regulations" appears on every page of Part 11, sometimes many times. If the amendment is not carried, this House will have no say in that at all. Last week, the amendment was defeated by just six votes, with the consequence that although this House has spent many hours debating Part 11—at Second Reading in July, in Committee of the whole House, last week on Report and today at Third Reading—we are to have no role whatever in relation to the many sets of regulations that will fall to be tabled.
	Of course last week's vote must be respected. I respect it; I accept that it will be for another place—and that place only—formally to approve those many regulations. However, I find it surprising that the noble Baroness has taken this line. She has been full of praise for what this House has done to the Bill, including to Part 11, and about the contribution that noble Lords have made. I have in my hands a letter that she sent to me only a few days ago, which states:
	"I thought the debate was outstanding, and I continue to learn a great deal from the collective wisdom of the House".
	That is what we can bring to bear on this matter. The amendment recognises, of course, that the actual approval of the regulations must now rest with another place. We seek to provide opportunities for noble Lords to bring their "collective wisdom" to bear on the process.
	This House has always recognised that certain financial matters are open to the claim of privilege by another place, and I do not seek in any way to challenge that. The purpose of the amendment is to provide, between the tabling of the draft regulations and their approval by another place, time for both Houses to consider them and express their views, and for Ministers to respond. I emphasise "both Houses"—this House as well as another place. In other words, this House should be consulted, even if we do not have power to approve the regulations. Anyone who listened to the last debate will realise just how much of CIL will depend on the regulations. How much each House might use that opportunity is not for the Bill, of course, but for discussions between the usual channels. The amendment does no more than offer several possible ways of doing it.
	If the amendment is carried, as I hope it will be, it will be open to the other place to accept it or redraft it in a form acceptable to parliamentary counsel. Alternatively, another place might choose to draw a distinction between the regulations that bear directly on the charging of CIL and the rest, which are of a more administrative nature. That distinction was made in paragraph 26 of the Delegated Powers Committee's report, which referred to "matters referred to" in certain clauses which are "not obviously financial". That must be for another place; it is not open to me to table an amendment to make that distinction. The important point for us this evening is that another place will not be given the chance to decide what to do unless we return the Bill to it with this amendment in it.
	What lies behind my concern is the increasing tendency of the other place to regard references to "Parliament" as meaning the House of Commons only, a point made on the Bill by the noble Lord, Lord Turnbull. I am sorry that he is not in his place; I drew his attention to the fact that I was going to quote him. He said:
	"I am beginning to think that the other place has got into the habit of conflating the word 'Commons' and the word 'Parliament', when they are two different things".—[Official Report, 14/10/08; col. 660.]
	As I said a moment ago, we are a bicameral legislature and that must never be forgotten. We had a striking example of the tendency with the statistics Act last year. The Act provided that the new statistics authority was to be accountable to Parliament. The Liaison Committee of this House unanimously recommended that that should be via a Joint Committee of both Houses. That was accepted by noble Lords, but Ministers in the other place interpreted the Act to mean accountability to the House of Commons alone. Despite appeals from the then Leader of the House—the noble Baroness, Lady Ashton—the proposal by this House was simply rejected. Tonight we have another example.
	I accept that it is for the other place to assert its financial privilege, but that should not exclude this House having a role in the consideration of the CIL regulations. There may be honourable and right honourable Members in another place who want further reforms of this House, but that should not lead to the exclusion of this House from any role with respect to the regulations to be made under Part 11. I beg to move.

Lord Goodhart: My Lords, the Government have been constructive, through the Minister, in response to many amendments proposed by other Members. However, the response to the issue of the involvement of your Lordships' House in the making of the regulations that will be needed under the Bill has been negative, to say the least. I must make it clear that I do not speak today on behalf of the Delegated Powers Committee, because it has not had an opportunity as a committee to consider the amendment. However, one necessary function of the committee is to see that the rights of your Lordships' House are not overlooked or diminished by legislation that the Government propose to introduce. That, I am afraid, is what is happening now.
	We should surely start from the presumption that the roles of your Lordships' House and of the House of Commons in respect of delegated legislation are equal, subject to the exception of supply Bills and other financial Bills and to the exercise of financial privilege of the House of Commons. I therefore greatly regret the vote last week that resulted in your Lordships' House rejecting its own right to claim involvement in the making of statutory instruments. That weakened your Lordships' House. It would have been a good thing if new regulations had required resolutions of both Houses—certainly in many cases. That is especially so because the secondary legislation gets far less attention in the House of Commons than it does here. The House of Commons has nothing equivalent to the Delegated Powers Committee or the Merits of Statutory Instruments Committee. Debates in the House of Commons on statutory instruments are notoriously brief.
	We are a revising House. The exercise of our revising powers in recent weeks has shown the importance of these powers, both in this Bill and in others that have been before your Lordships' House in the last few days. It is obvious, however, that a great deal of work on the Planning Bill remains to be done. Although the Delegated Powers Committee has accepted that Part 11 is no longer to be regarded as a skeleton, an enormous amount is still left to be exercised by secondary legislation. No fewer than 18 of the 21 clauses in Part 11 contain powers relating to the making of regulations. This amendment would merely enable your Lordships' House to express its views on the draft regulations and to require the Secretary of State to respond to those views. The House of Commons would thereby have the benefit of the views of your Lordships' House but the House of Commons would not be bound by them in any way. This plainly would not trespass on the privilege of the House of Commons.
	I do not see this as a party-political matter. The question is whether your Lordships' House, having played a large part in the development of Part 11, should be excluded from any further involvement in development through regulations. We have already been excluded from the right to vote on resolutions needed to implement Part 11. If we in your Lordships' House are also to be denied the lesser right to have our views expressed and considered before the House of Commons approves these regulations, that will set a dangerous precedent, which may well weaken our powers of revision. That is why I support this amendment.

Lord Howarth of Newport: My Lords, I am extremely glad that the noble Lord, Lord Jenkin, has found a way to bring this important issue back to the House at Third Reading. We owe him a debt of gratitude for identifying the issue and pursuing it so resolutely. The arguments that he and the noble Lord, Lord Goodhart, presented to the House in our debate on Amendment No. 130 on Report and the arguments that they have presented today are irrefutable. I have never seen my noble friend the Minister so miserable in dutifully defending the indefensible.
	In our vote on the amendment moved by the noble Lord, Lord Jenkin, on Report, this House deprived itself of the power and the responsibility—long-established without peradventure and amply demonstrated in the many precedents cited by the noble Lord, Lord Jenkin—to approve or disapprove regulations governing charges or levies as opposed to taxes raised for the Exchequer on the principle that the noble Lord, Lord Goodhart, just explained. That was a gratuitous act of self-immolation.
	If significant constitutional change is to be introduced, it should not be introduced as an incidental aspect of legislation. Although I make no personal criticism of my noble friend the Minister, I believe that in introducing this change the Government should have been candid with the House. Equally, the House should have been vigilant. The House should not abandon its rights and its responsibilities without the most careful consideration, in a fit of absence of mind. That is what happened last week when we had a vote on a poor turnout and, by 96 votes to 90, as I recollect, the noble Lord's amendment was lost. This amendment gives us the chance to retrieve at least a good part of what we threw away last week. I hope that the House will acquit itself better today than it did last week.

Lord Boyd of Duncansby: My Lords, I did not support the Government in the Lobbies on the vote last week. Although I was in the building, I absented myself from the vote. That was because I am a member of the Delegated Powers and Regulatory Reform Committee, which had reached a clear view on what the proper procedure should be. For those reasons, I felt that I could not support the Government. I would certainly have no difficulty, however, in supporting the Government in the Lobbies tonight if this matter is pushed to a vote. There are three reasons for that. First, although the noble Lord, Lord Jenkin, says that he respects the vote last week, it seems clear that this is an attempt to revisit that vote.

Lord Jenkin of Roding: My Lords, if I did not make it clear, I now make it absolutely clear that I am not seeking in any way to give this House a joint right to approve the regulations. The House decided last week that it did not want that and I made it clear in my opening speech that I am not challenging that. All I want is that we should have a say.

Lord Boyd of Duncansby: My Lords, I take that point; I was referring more to the point made by the noble Lord, Lord Goodhart. Nevertheless, this House took a decision last week, albeit by a small majority, on the way ahead.
	The second reason why I oppose this is that it seems to bring a new procedure into the legislature. I have been a member of this House for only two years, but I have never seen any procedure like this before. We have never discussed this or anything like it in the Delegated Powers and Regulatory Reform Committee.

Lord Goodhart: My Lords, I understand the noble Lord's position, but I refer him to the super-affirmative provision that was included in the Legislative and Regulatory Reform Act 2006. That provision is not unlike, although it is somewhat broader than, those contained in this amendment.

Lord Boyd of Duncansby: My Lords, the super-affirmative provision within the legislative reform procedure is there because we are dealing with primary legislation. This is not primary legislation; it is subordinate legislation.

Lord Howarth of Newport: My Lords, was not a procedure—closely akin to the procedure that the amendment tabled by the noble Lord, Lord Jenkin, envisages—adopted by the House last Monday in a Motion moved by the noble Lady, Baroness Thomas of Winchester, in which social security regulations were considered by the House?

Lord Boyd of Duncansby: My Lords, I am not aware of that provision; the noble Lord has the advantage of me in that respect. It does seem, however, that this is a new procedure within primary legislation to deal with subordinate legislation.
	The third reason why I cannot support the amendment is that it seems to have flaws. The new procedure would provide that no subordinate legislation would be made by the House of Commons unless a period of 60 days had elapsed. During that period of 60 days, either House of Parliament would have the opportunity to debate the regulations or to refer them to any committee for a report. What would happen if, on the 59th day of that period of 60 days, one of the Houses—particularly this House, as it might be seen as obstructive of the House of Commons—referred the regulations to a committee? Would that suspend the operation of the 60 days?

Lord Goodhart: My Lords, I should have thought it pretty clear that it would not. There is a 60-day period within which a committee would have to produce a report and, if it had not produced a report by the 59th day, there would be nothing left for it to do.

Lord Boyd of Duncansby: My Lords, I say with the greatest respect to the noble Lord that new subsection (3) says:
	"During the period of 60 days—
	(a) either House of Parliament may—
	(i) debate, or pass a resolution relating to, the regulations, or
	(ii) refer the regulations to any committee for a report".
	It seems to me that if, on the 59th day, the regulations are referred to any committee for a report, it is obvious that no report can be obtained from that committee before the 60th day.

Lord Jenkin of Roding: My Lords, the noble and learned Lord is misreading the amendment. The words,
	"During the period of 60 days",
	in subsection (3) cover both paragraphs (a) and (b). Subsection (b) states that,
	"the Secretary of State must respond".
	The circumstances postulated by the noble and learned Lord, frankly, lack credibility. Sixty days should be enough for either House to make a point and for the Government to respond. We are simply asking for this House to have a say.

Lord Goodhart: My Lords, perhaps the noble and learned Lord, Lord Boyd, would look—

Lord Davies of Oldham: My Lords, I hesitate to intervene, but this is Third Reading and we are rapidly turning it into Committee proceedings. This should be the last intervention in my noble and learned friend's speech.

Lord Goodhart: My Lords, I should like to make this point. Paragraph (c), which refers to the affirmative resolution procedure, states that the regulations,
	"shall not be made unless, before approval by the House of Commons, a period of 60 days has elapsed, beginning with the day on which the regulations were laid".
	Surely that makes it perfectly obvious that the House of Commons can proceed with its resolution at the end of the 60-day period without waiting any longer for any report to emerge.

Lord Boyd of Duncansby: My Lords, in one sense, that makes my point. If, towards the end of the 60 days within which it can refer the matter to a committee, the House refers it to a committee, that makes the whole thing pretty pointless. In my submission, this House has taken a decision on the correct way forward and has said that it is content that the House of Commons should exercise its privilege in financial matters. We should now accept that.

Lord Dixon-Smith: My Lords, my name is added to this amendment, so I believe that I am entitled to say something, although I have little to add to what my noble friend has said. I find the remarks of the noble and learned Lord, Lord Boyd of Duncansby, very depressing. In earlier stages of the Bill, it was quite clear, in discussions on other matters, that there was a view on the government Benches that it would be completely alien for Members of this House or of Parliament to behave efficiently and in a businesslike way, that that would never happen and that progress could not be made. I am sorry, but I do not believe or accept that. It is very depressing that anyone could even make those kinds of remarks. We have spent a great deal of time already in this House considering CIL. If we have no place in the decision-making on this, what have we been doing? As the result of consideration here, the Bill has been greatly improved. That justifies my noble friend's amendment.

Baroness Hamwee: My Lords, as the noble and learned Lord, Lord Boyd of Duncansby, started to give his critique, my heart sank, but when I realised that paragraph (c) in the amendment would be part of Clause 221(2), that subsection (3) would be a separate subsection and that paragraph (c) is not subject to subsection (3), my spirits rose again. I had not thought it likely that the noble Lord, Lord Jenkin of Roding, and my noble friend, who worked together closely on this amendment, would have made a basic drafting error, although, for about 30 seconds, I thought that the noble and learned Lord had spotted one.
	It has been put to me that, even without this amendment, this House could do what is suggested by having a debate, passing a resolution and setting up a committee. That is so, but paragraph (b)—the provision that the Secretary of State must respond—is at the heart of good scrutiny; it requires a response and feedback. The attention to detail shown by your Lordships' House to Part 11 over the past few days demonstrates the value of such scrutiny. The arrangements proposed in the amendment would perfectly capture the skills of this House, although they do not go as far as those that some of us supported when dealing with the amendment last week.
	We are told that this is not a tax—although that raises issues. However, the development and regeneration that might come about as a result of this levy will certainly be affected by the detail as well as by the principle. Again, this House would have a valuable role to play. Finally, the comment was made—possibly by the noble Lord, Lord Jenkin—that the House of Commons and the House of Lords have equal roles in a bicameral Parliament. I would say that they are complementary—perhaps they are equal and complementary—and the complementary element is captured by this amendment, which we on these Benches support.

The Earl of Caithness: My Lords, at Second Reading, I criticised the Minister for excluding this House from looking at the regulations. I put my name to the amendment tabled by the noble Lord, Lord Jenkin, in Committee, as I believe that it is important that this House should be consulted at least in this small way. Without the work that we have done in Committee, on Report and, today, at Third Reading, this Bill would be in considerably worse shape. To exclude this House is purely a political decision; it has nothing to do with the policy in the Bill. The Minister should think carefully about the route that she is taking.

Baroness Andrews: My Lords, I am well aware of the strong feeling about the role of the House as we have worked through this part of the Bill. I absolutely understand the genuine passions expressed so consistently, particularly by the noble Lord, Lord Jenkin. However, I need to remind the House that last week we resolved, on Report, not to accept the amendment moved by the noble Lord, Lord Jenkin, which would have provided for all CIL regulations to be made subject to the affirmative resolution of both Houses. This is a question not of what the Minister wants, but of what the House wants, and the House decided last week that it did not want affirmative regulations. This is not a political issue.
	While I understand the disappointment that has been caused, I think that the amendment would create more problems than it would solve. It would provide, alongside the affirmative procedure in the other place, for a 60-day period during which either House could debate or pass a resolution on the draft regulations, or refer the draft regulations to any committee for report. The Secretary of State would then have to respond to any debate, resolution or report before the other place could give its approval to the regulations. The amendment would control the circumstances in which the other place might approve any CIL regulations. Sixty days would have to pass and the other place could not approve regulations until the Secretary of State had responded to any debate, resolution or report.
	I will come to the procedural issues in a moment. On the practical details, I ask noble Lords to think about what would be involved. Part of the problem is that we do not know. The amendment risks turning the process for making CIL regulations into a long and complex one. It would permit this House to refer a draft of the CIL regulations to a committee to consider and issue a report. My noble and learned friend Lord Boyd asked some pertinent questions and some clarification was forthcoming. All I can see is that there would be considerable delay in making CIL regulations. The process would also apply to amendments to CIL regulations to close a loophole or to correct a minor error. We are looking at a long procedure every time that we try to amend CIL regulations.
	Throughout this process we have tried to balance fairness and transparency with greater speed so that we can put arrangements in place to raise the funding that we now so urgently need for local infrastructure. On timing, I indicated that the Government would not make the CIL regulations before autumn 2009. However, once it is right to do so, surely those regulations should be made promptly to enable charging authorities to generate additional revenue for infrastructure.
	The substantive response to the amendment rests on two arguments. The first is that—with the exceptions of delaying the other place's affirmative resolution debate by 60 days and compelling the Secretary of State to respond to the debate or resolution—what the noble Lord seeks to achieve is already achievable. My noble friend Lord Howarth referred to last week's debate and the Motion tabled by the noble Baroness, Lady Thomas. There is nothing to prevent this House from debating anything that it wants on a Motion, if it should so choose. There are two issues there. The amendment would also require the Secretary of State to respond to any debate, resolution or report made by either House. It is unclear what form this response would take. How useful would it be? Exactly what duty would be placed on the Secretary of State? What would it do to the relationship between the two Houses in terms of secondary legislation?
	I argue that, as noble Lords have emphasised in practically every speech, the role of our House is one of scrutiny and revision. My fear is that we would not have scrutiny and that this procedure would diminish the value of the scrutiny that we offer; it would dilute the notion of scrutiny. This would be a debate without powers to annul, at a time when we are absolutely insistent on the value of this House. What I said to the noble Lord in my letter was perfectly compatible with what I have just said and with my respect for this House. There is a genuine problem there with the role of this House.
	Secondly, my noble friend Lord Howarth talked about a constitutional change suddenly being imposed. This is my real anxiety. We are inventing a new form of parliamentary procedure for secondary legislation. This is a new convention, which raises fundamental issues about the relationship between the two Houses in considering secondary legislation.

Lord Howarth of Newport: My Lords, will my noble friend explain why the Government felt it appropriate to set aside an existing constitutional convention?

Baroness Andrews: My Lords, I really do not think that is comparable. As I said, it raises profound questions, not only about the relationship between the two Houses in considering secondary legislation but about the role of the Secretary of State in this. When this House chooses to change and improve, it does so on the basis of serious consideration that crosses all parties. I have sympathy with what the noble Lord has tried to do, but I am seriously concerned that it would have dire consequences for the business of the House, the making of regulations and, perhaps, even the nature of regulations. It is not the way to reform the conventions of this House at the final stages of a complex, much improved Bill, in response to the failure of an earlier vote. I know the noble Lord is not revisiting that, and that what he wants is to give this House a voice at all costs. I am afraid that I cannot accept the amendment.

Lord Jenkin of Roding: My Lords, that is a deeply disappointing speech. Perhaps I must remind the Minister of the words that I used in moving this amendment: of course that vote must be respected, and I accept that it will be for another place only formally to approve the many regulations. The noble Baroness began by saying that we were trying to reverse last week's vote. That is absolutely not true. We are now asking for a say in what happens here, that is recognised in the legislation. If the Minister does not like the procedure which I have set up, it is open to the Government to come forward with some other way in which this House could have a say. They can only do that if we send this amendment back to the other place. I wish to test the opinion of the House.

On Question, Whether the said amendment (No. 27) shall be agreed to?
	Their Lordships divided: Contents, 128; Not-Contents, 125.

Resolved in the affirmative, and amendment agreed to accordingly.
	Clause 224 [Community Infrastructure Levy: repeals]:
	[Amendment No. 28 not moved.]
	Clause 239 [Extent]:
	[Amendment No. 29 not moved.]

Baroness Andrews: moved Amendment No. 30:
	Clause 239, page 140, line 39, leave out "139" and insert "(Common land and rights of common)"
	On Question, amendment agreed to.
	Clause 240 [Commencement]:

Baroness Andrews: moved Amendment No. 31:
	Clause 240, page 141, line 38, after "sections" insert "(Good design),"
	On Question, amendment agreed to.

Baroness Andrews: My Lords, before I move that the Bill do now pass, I shall say a warm thank you to everybody who has improved it. I want to single out the noble Lord, Lord Jenkin, who has been remarkably assiduous and has kept us on our toes. It has been the greatest pleasure to work with the Opposition on improving a Bill that we can be proud of. I thank my noble friends who have been incredibly supportive and successful. We have some ping-pong, but it will be quite restricted. Above all, I thank my officials. I have worked with many Bill teams, but this team has worked very late and very long, has risen to the challenge of an extremely technical Bill and has done a brilliant job. I also thank my private office. With that, I beg to move that the Bill do now pass.
	Moved accordingly, and, on Question, Bill passed, and returned to the Commons with amendments.

Local Transport Bill [HL]

Lord Adonis: My Lords, I beg to move that the Commons amendments be now considered.

Moved accordingly, and, on Question, Motion agreed to.
	commons amendments
	[The page and line references are to Bill 67 as first printed for the Commons.]
	Amendments Nos. 1 to 8

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 1 to 8. I shall speak also to Amendments Nos. 9 to 17, 149 to 151, 154, 155, 175 and 176. These amendments are relatively minor and technical. Amendments Nos. 1, 10, 149 to 151, 154 and 155 amend existing powers in the Bill that empower the Secretary of State to make secondary legislation containing provisions that are directly related to matters covered in the Bill.
	I shall take Clause 6 as an example. It includes a power to make provision consequential on, or supplementary to, Clauses 2 to 5. Clause 6 goes on to state that this includes the power to amend,
	"any enactment (whenever passed or made)".
	The purpose of Amendment No. 10 is to clarify that the power would enable future secondary legislation to amend provisions contained in the Local Transport Act itself, or provisions as amended by that Act, as well as other enactments.
	Amendments Nos. 2 to 8 amend the consultation requirements that are imposed on the senior traffic commissioner. The main change is that, before issuing directions or guidance to the other commissioners, the senior commissioner would be required to consult such organisations representing the interests of public transport users as he thinks appropriate. Amendment No. 9 confirms that the Secretary of State may issue guidance to the senior traffic commissioner about any of his functions.
	At this point, I refer to the amendment tabled by my noble friend Lord Rosser, Amendment No. 9A, which is intended to ensure that the senior traffic commissioner has regard to any recommendations made by the Public Transport Users Committee for England or the Rail Passengers' Council, now popularly known as Passenger Focus, so that enforcement action could be considered against poorly performing operators. I believe that I can meet the concerns that my noble friend has in this regard. Back in April, the Secretary of State announced that, subject to further consultation on the details, additional functions would be conferred on the Rail Passengers' Council to enable it to represent the interests of bus passengers. That reflects the fact that many respondents to our consultation on strengthening bus passenger representation had a clear preference for Passenger Focus taking on this role. Passenger Focus already does a good job representing rail passengers, and there are economies of scale in giving the role to an existing statutory body; therefore, we do not intend to establish a public transport users' committee at the current time.
	However, I assure my noble friend that, were we to establish such a committee, the powers in the Bill would be wide enough to place certain requirements on the senior traffic commissioner to take account of recommendations made by the committee if that was thought desirable. Similarly, the current clause enabling the Secretary of State to confer bus and coach functions on the Rail Passengers' Council through secondary legislation would be wide enough to make similar requirements of the senior traffic commissioner, if thought desirable. Due consideration would, nevertheless, need to be given to ensure that it was done in such a way as not to prejudice or diminish the authority or independence of the senior traffic commissioner. The secondary legislation will be subject to the affirmative resolution procedure, so there will be a proper opportunity for your Lordships' House and the House of Commons to debate the detailed proposals.
	Amendments Nos. 11 to 16 relate to local transport plans. Amendment No. 11 makes explicit that local authorities must have regard to government policies and guidance relating to climate change mitigation and adaptation, as well as other environmental issues. This responds to points raised in the House in earlier debates on the Bill, as well as to debates in the other place.
	I shall say a few words about the amendment to the Motion proposed by the noble Lord, Lord Bradshaw. We entirely share his view that the planning and delivery of transport, whether by central government or local authorities, should play its full part in mitigating the threat posed by climate change. I reassure him that we will be emphasising the importance of taking that goal into account both in the guidance that we give to regions on planning regional transport priorities and in the draft guidance to local authorities on local transport plans, which we will publish before Christmas.
	We are also developing the tools that regions and local authorities urgently need to help them assess the impact of their proposals and policies on the emission of greenhouse gases. Measuring such impact is, I fear, far from simple. It is well known, for example, that a well intentioned but badly planned measure to reduce congestion, and the emissions that result from that congestion, may have the unintended effect of encouraging more people to use their cars. We need to ensure that local authorities are encouraged not only to reduce emissions but to do so effectively.
	Given our current state of knowledge, it is simply impossible for local authorities to estimate with any great accuracy the total impact of their transport policies on climate change. We do not believe that making such matters a potential issue for the courts to determine, as might happen under the noble Lord's amendment, is the right way forward at this stage. In addition, it is important that local authorities consider the threat of climate change against the totality of their policy, taking into account the need to integrate transport policies with, for example, housing and land use planning.
	Measuring the impact of transport policies alone carries a significant risk of perverse results. Impacts need to be measured across local authority policies, so that the best measures overall may be planned and implemented. I stress again to the noble Lord that we will be emphasising the importance of taking the threat posed by climate change into full account in the guidance that we give to both regions and local authorities on local transport plans.
	Amendment No. 16 makes explicit that local authorities must consult transport providers and transport users when developing their local transport plans. Clause 12 would transfer responsibility for local transport policies and plans in our major cities outside London to the Integrated Transport Authority for the area concerned, but the ITA would be required to consult the councils falling within its area.
	However, there are some statutory references to local transport policies developed by metropolitan district councils. Those councils will no longer be developing such policies, so those statutory references will no longer work. Amendment No. 17 and consequential Amendments Nos. 175 and 176 clarify how those references are to be interpreted once Clause 12 comes into force. I beg to move.
	Moved, That the House do agree with the Commons in their Amendments Nos. 1 to 8.—(Lord Adonis.)

Lord Hanningfield: My Lords, some of us are surprised and a little concerned that so many amendments and clauses were brought to this House at such a late stage, but I accept the Minister's statement that a lot of them are tidying-up amendments and improve the Bill. I do not intend to say too much, except to welcome one or two things, but we have one or two concerns that we should discuss about provisions that might reduce the democratic aspect of the Bill. We are also obviously concerned about the imposition on local authorities. That will come up during the evening.
	I especially welcome the amendment that means that we should consult passengers. We all think that we should do that; we discussed it at an earlier stage. I also welcome the Minister's comments on climate change; however, I hope that the Government practise what they preach. When you cross the QE2 Bridge as you go round the M25, a cloud continuously hangs over the toll booths. The Government may solve such things. Charges for the Dartford Crossing should be considered.
	The Government should practise what they preach, but I tend to agree with the majority of the amendments, so I have no further comments.

Lord Rosser: My Lords, I note what the Minister had to say about the amendment in my name but I am not entirely sure how far he is committing the Government in relation to the role of Passenger Focus. To be effective Passenger Focus is going to need to have some teeth, particularly given the problems that some passengers face with bus services outside London. I recognise that secondary legislation will deal with the powers of that watchdog in more detail but I would like to see secondary legislation ensure—and I would be grateful if my noble friend could confirm if this is his intention—that the watchdog Passenger Focus has a role on appeals on complaints because that would bring it into line with its equivalent for London, which applies to bus services in London as well as rail services. I would also like to see Passenger Focus given the powers to access performance information from operators which at present is not readily available and without which it is difficult to see how Passenger Focus could do its job.
	Obviously the purpose of the amendment was to enhance the authority of the watchdog by ensuring that the traffic commissioners have regard to the views of the watchdog. If passengers are unhappy with what is happening to their services, they will surely expect the passenger watchdog to be able to do something about it. I ask the Minister to repeat the commitment that he appears to have given to ensure that I have understood it. At present the watchdog has no powers to make operators do anything about the service problems that passengers might be complaining about. However, the traffic commissioners have the powers to act on poor services because they can investigate and penalise poor performance. The amendment would mean that the body designated as the passengers' champion can ensure that the bodies with the powers to act on poor bus services, namely the traffic commissioners, have to take into account passenger concerns. I urge the Minister to look very hard—and I am asking for a very clear response to make sure that I have understood the commitment he appears to have given—at how secondary legislation can ensure that the passenger watchdog has the full range of powers it needs to represent passengers, including a role on complaints and appeals arising from complaints, the ability to access performance information, and the ability to ensure that traffic commissioners have regard to its representations on behalf of passengers. Can the Minister say whether the issues I want to see Passenger Focus be able to deal with are covered by the assurances he gave?

Lord Bradshaw: My Lords, the noble Lord, Lord Rosser, said that Passenger Focus needs more teeth, to sum it up in a few words. He spoke entirely about complaints by users to Passenger Focus and yet in a presentation last night which the noble Lord, Lord Rosser, and I were at, the problems that people are bringing to Passenger Focus relate to such things as the overcrowding of trains, which is entirely in the hands of government. It is not much good having a passenger watchdog that can bite in one direction but cannot bite in the other. It needs to be a two-way-facing organisation, not a one-way-facing one.
	On my Amendments Nos. 11A and 11B relating to climate change, I accept what the Minister has said. My worry is that the guidance issued might be issued in such a way that local authorities which choose to do so may ignore it. I remember the debate we had on the Traffic Management Act 2004. That was supposed to bring some discipline to the use of the highway by utility companies and it has not worked at all well because certain local authorities either ignore it or are too weak to enforce it. As congestion is the major reason for the unreliability of bus services and the escalating cost of the bus industry, it is important for central government to address issues such as traffic management and climate change in a way that will bring about some advance.

Lord Snape: My Lords, I do not have any problem with the amendment moved by my noble friend Lord Rosser. Indeed, the strengthening of the powers of Passenger Focus is not something, I would have thought, that any of us in your Lordships' House would object to. However, whether inadvertently or not, I felt that he glossed over many of the problems that give rise to complaints where bus services are concerned. I am not surprised about that because the brief that he delivered was prepared by the Passenger Transport Executive Group which believes that the only problem with buses is the question of ownership. Yet a countrywide survey made of passengers earlier this year—and I do not propose to read out the figures again because I did so at an earlier stage—revealed that in passenger transport executive areas in particular the main complaints of passengers were not the matters raised by my noble friend Lord Rosser but those of overcrowding on some services, congestion and the lack of information about where buses go to and how to pay fares, because many towns and cities have a different system of fare collection. These are all matters not for wicked bus company owners but for the passenger transport executives, although there is no mention of them in the brief that they habitually provide.
	While supporting the aim behind the amendment tabled by my noble friend Lord Rosser, I hope the Minister will agree that other matters ought to be addressed, such as the recalcitrance of some local authorities to provide proper paths for their buses, proper areas restricted for bus users—bus lanes in other words—and the habit in some cities, including Birmingham which is run by a Conservative-Liberal coalition, of removing bus lanes because the leaders of those councils are in thrall to the private car. I hope these matters will be addressed by the Minister and he will bear in mind that the main complaints of many of our passengers in our major towns and cities lie at the feet of the passenger transport executives rather than those who own and operate the buses.

Lord Adonis: My Lords, I am grateful to noble Lords for the broadly positive welcome they have given to this first group of amendments. The noble Lord, Lord Bradshaw, is right that it is not sufficient simply to produce guidance. The guidance needs to be taken seriously by local authorities. However, it appears to the Government that local authorities are taking the need to give much greater priority to the tackling of climate change very seriously indeed. The number of local authorities which have chosen to include an emissions target among their priorities in local area agreements is very encouraging. One hundred out of 150 local authorities have selected National Indicator 186 measuring the per capita reduction in CO2 emissions in the relevant area as a priority in their local area agreement with the Government. All 150 will monitor progress against this indicator and this will feed into the Audit Commission's comprehensive area assessment starting next year. So the trend is encouraging but as I stressed in my opening remarks, it is very important that the Government provide local authorities with much better tools with which to assess the impact of their proposals and policies on the emission of greenhouse gases because this is not an area in which many authorities have had much experience.
	This is a collaborative process between us and local government. We are working together to identify best practice. Local authorities are willing to take action, and we now need to capitalise on this spirit of good will to see that it leads to real change on the ground.
	I am glad that the noble Lord, Lord Hanningfield, welcomed the improved consultation requirements and the climate change measures that we have put into place. As we develop the guidance to which I referred, I will see that both noble Lords are kept informed. We welcome any comments that they have to make on the guidance as we develop it.
	My noble friend Lord Rosser asked specific questions about the powers of Passenger Focus. I hope that I can give him some reassuring replies. We will consult early in the new year on the secondary legislation about Passenger Focus, but I can tell him that powers under Section 6(9)(k) of the Transport Act 1985 could be used to require operators to provide information; for example, to Passenger Focus. It is important that Passenger Focus has the information that it needs to go about its job. We believe that it will play a significant and positive role in relation to buses, as it has been doing in relation to rail. The recent South Central franchise process, for which we recently issued an invitation to tender, took substantial account of the views of Passenger Focus. Indeed, we made a number of changes to the design of the tender as a result of its comments.
	My noble friend also asked about complaints and Passenger Focus having a complaints-handling role in relation to buses, as it does in relation to rail. As he will be aware, an existing body—the Bus Appeals Body—already performs a complaints-handling role. However, we recognise that there are some concerns about the way in which complaints are sometimes dealt with in the bus sector, and we will ask Passenger Focus to undertake a review of the existing complaints-handling process. If this provides evidence that the current system is inadequate, we expect Passenger Focus to work with the industry to explore options for addressing this. Our future action will depend on the outcome of this work.
	I hope that my noble friend is satisfied that we are taking steps in the direction that he wants, and I commend the amendments to the House.

On Question, Motion agreed to.
	Amendment No. 9

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 9.
	Moved, That the House do agree with the Commons in their Amendment No. 9.—(Lord Adonis.)

[Amendment No. 9A, as an amendment to Amendment No. 9, not moved.]
	On Question, Motion agreed to.
	Amendment No. 10

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 10.

Moved accordingly, and, on Question, Motion agreed to.
	Amendment No. 11

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 11.
	Moved, That the House do agree with the Commons in their Amendment No. 11.—(Lord Adonis.)

[Amendment No. 11A, as an amendment to Amendment No. 11, not moved.]
	On Question, Motion agreed to.
	Amendments Nos. 12 to 17

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 12 to 17.

Moved accordingly, and, on Question, Motion agreed to.
	Amendment NoS. 18, 147, 148, 152, 153 and 156 to 158.

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 18, 147, 148, 152, 153 and 156 to 158. Again, these are relatively minor and technical amendments. Amendment No. 18 relates to quality partnership schemes and specifically the power for the Secretary of State and the Welsh Ministers to make regulations about admissible objections. As noble Lords may recall from earlier debates, the idea of admissible objections is that bus operators should have the opportunity to object to requirements relating to fares, frequencies or timings in a quality partnership scheme which they believe are unachievable or commercially unviable, but they should not have the opportunity to veto local authority proposals on spurious grounds.
	It is therefore envisaged that the traffic commissioners will play a role in determining whether operators' objections are admissible, in cases where the operator and the local authority cannot reach agreement. The Government have in mind that a traffic commissioner may need to call on an independent expert to assist him, in which case it may be necessary for that expert to be paid for his or her assistance. Amendment No. 18 simply enables future regulations to provide for such payments.
	Amendments Nos. 147 and 148 are about the powers of the traffic commissioners where a bus operator is failing to run his services properly. The Bill already includes a new power for the traffic commissioners to order a failing operator to expend money to improve his services. The amendments make it clear that the traffic commissioner can be more specific about the precise improvements on which the operator is to spend money delivering, and that he can also require money to be spent on improving facilities such as information at bus stops.
	Amendments Nos. 152, 153 and 156 to 158 relate to bus passenger representation. Clause 69 already empowers the Secretary of State through secondary legislation to confer new functions on the Rail Passengers Council—commonly known as Passenger Focus—to allow them to represent the interests of bus as well as rail passengers. We considered this issue a moment ago in our debate on the previous group of amendments. The amendments now under discussion provide flexibility to allow the remit of Passenger Focus to be broadened to cover matters relating not only to bus and coach services but to tram services and passenger transport facilities. The department will consult on whether Passenger Focus should represent tram passengers in due course.

On Question, Motion agreed to.
	Amendments Nos. 19 to 43

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 19 to 43.
	Part 3 is aimed at enhancing the powers available at a local level to secure improvements in the standard of local bus services. Buses are a crucial part of our local transport system and over the past few years we have seen the first sustained increases in bus patronage across Great Britain for half a century. A number of places around the country where local authorities and bus operators work in partnership have delivered real improvements to services. As a result, more people are getting on buses.
	However, there are still too many places where passengers are not enjoying improvements and where patronage continues to fall. Where voluntary partnerships are working well, the Government applaud them. But it is also important that other options are available, particularly for those areas where partnerships are not delivering improvements. This Bill seeks to devolve decisions to those who understand the needs and requirements of their local areas and to ensure that the right tools—voluntary partnerships, quality partnership schemes and quality contracts schemes—are available at a local level.
	The Bill includes various provisions to make quality contracts schemes a more realistic option for local authorities, while also preserving appropriate safeguards for bus operators. This group of amendments covers four aspects of these provisions. The first effect of this group is to ensure that in England the elected local authority takes the final decision about whether a quality contracts scheme should be made in its area. The amendments replace the proposed approvals boards with QCS boards. Rather than making the final decision as to whether a scheme should go ahead, the role of a QCS board would be to provide an opinion and, where appropriate, to make recommendations to the local authority. It would be for the local authority to take the final decision, having considered the board's opinion and any recommendations.
	The amendments also spell out more clearly the precise role of these boards. The boards will be expected to consider two things; namely, first, whether the local authority has fulfilled the statutory requirements to give notice of their proposed scheme and to consult on it and, secondly, whether the proposed scheme meets the "public interest" criteria set out in the Bill.
	The amendments retain a role for the Transport Tribunal in hearing appeals against a local authority's decision to make a scheme. The scope of this appeal right would depend on whether the proposed scheme had received a clean bill of health from the QCS board. If it had received a clean bill of health in terms of meeting the five statutory public interest criteria and in terms of consultation, the appeal is restricted to points of law. The intention of this right of appeal to the Transport Tribunal is to provide a quicker, more accessible and less costly alternative to judicial review. Consistent with the preferences of the devolved Administration, the existing arrangements as regards schemes in Wales are left unchanged.
	The second issue dealt with in this group of amendments relates to employment protection. At earlier stages of the Bill's passage through your Lordships' House, amendments were made to strengthen the protections available to bus workers in an area where a quality contracts scheme is being introduced. The principal effect of those amendments was to provide certainty that the Transfer of Undertakings (Protection of Employment) Regulations 2006 would apply where an operator is forced to stop running bus services because a quality contracts scheme is coming into force.
	Amendments Nos. 132 to 136 strengthen further the protections available. They define an additional situation where TUPE would apply. They also make provision about pension protection, placing a duty on the Secretary of State to make regulations to ensure that workers involved in the provision of bus services in the scheme area before the scheme was made do not lose out in pension terms as a result of the scheme.
	The third issue, covered by Amendments Nos. 20, 70 and 122 relates to local authority powers to operate bus services in certain circumstances. This responds to questions raised during the Bill's passage through your Lordships' House and the House of Commons. These amendments would provide a power for a local transport authority to operate local bus services in a very specific set of circumstances; namely, where an operator of services under a quality contract had ceased to provide those services before the contract was due to terminate—for example, if the contractor goes into liquidation. In such a situation, it may be in the interests of passengers for the local transport authority to be able to step in for a limited period while it takes action to make appropriate arrangements for the longer term.
	Because this is intended to be no more than a temporary, emergency power, the amendments include a clear time limit of nine months, after which the authority can no longer operate the services. The Government have listened to the concerns of local authorities that they could face a very difficult position if they had not quite concluded their negotiations with a "replacement" operator at the end of that nine-month period. The amendments therefore also include a provision whereby the nine-month period may be extended by up to a further three months by the local traffic commissioner. The Government consider that this allows more than ample time for a competent local authority to make the necessary arrangements for a new contractor to be appointed and builds in an appropriate degree of flexibility through the three-month extension. I beg to move.
	Moved, That the House do agree with the Commons in their Amendments Nos. 19 to 43.—(Lord Adonis.)

Lord Snape: My Lords, first, I apologise to your Lordships for not declaring an interest in my earlier intervention today, although I have done so on previous occasions during the passage of the Bill. I am employed as a consultant to FirstGroup plc. I am also a declarable shareholder in the National Express Group, although given the state of the Stock Exchange I perhaps will not have to make that declaration for too many more years. It is only fair to say at the outset that, while I do not believe that the amendments in this group would significantly improve the Bill from when it last left your Lordships' House, I hope that the Minister can assure me and reassure the bus industry that the Government have stayed true to their word. Can he confirm that this legislation, as amended, will still protect the legitimate interests of bus operators and passengers?
	I am aware that we have had a long summer of lobbying. Indeed, we have had eight long years of lobbying on quality contracts. I am also aware that there has been some glee and jubilation from certain members of the passenger transport executives up and down the country over the recent amendments to the quality contracts scheme process. Those of us who have taken a long interest in these matters are aware that a great deal of face saving is involved and that the amendments under discussion in this group fall some way short of what the more control-oriented, let us say, brethrens of the local authorities sought. Ministers have been at pains over the past few months to allay any fears that the industry might have and to point out to bus operators that any quality contract proposal will still be subject to independent and sequential scrutiny. I know that many members of the bus industry are still comfortable that quality contracts are some way from the easy option portrayed by some in the Passenger Transport Executive Group. Will the Minister assure us that quality contracts will be used only as a last resort by sensible authorities that have exhausted all faster, more economic and passenger friendly options?
	Some people in the bus industry think that pressing for these amendments is something of an own goal by the would-be regulators as it could open the door to longer and more expensive legal action. "Bring it on" was the response, as I understood it, from certain more active members of the Passenger Transport Executive Group, but it is not their money. If you are paying for court cases with local ratepayers' money, it is less of a problem than it would be perhaps to a commercial operator.
	I believe that passengers will be best served if the legitimate interests of the bus operators are, as Ministers have continuously promised, properly protected. Bus operators got a bad and inaccurate press from those rather few honourable Members of the other place who participated in the debate throughout the most recent stages of the Bill. But it is important that Ministers concentrate on fact rather than rhetoric. It is a fact that £2.2 billion has been invested in buses outside London over the past 10 years. In seven of those 10 years, that investment exceeded net profit in the bus industry.
	FirstGroup, the company I work for, has built up over the past decade from a small municipal undertaking based in Scotland to a multinational company employing many thousands of people in the United Kingdom. In replying to the debate, the Minister should tread very carefully indeed so as not to cause any further anxiety in the bus industry, particularly during this somewhat delicate economic period. It is important, and I think both legitimate and right, that passengers as well as operators should have their legitimate interests protected under this legislation. Many people in the bus industry believe that if the quality contract route is to be followed without some of the safeguards that Ministers have indicated will be provided, much of their business—whether lawfully or not will be for the courts to say—will be confiscated. I understand that Ministers have assured the bus industry privately that even though this is far from an easy option, if the proposals were to be taken forward, not only would operators have every opportunity to put their own case, they would also have a proper right of appeal against any decision. It would help to allay many fears in the bus industry if the Minister could confirm that it is indeed the case that the amendments I would have proposed had he spoken at the time I expected him to speak—that is, on this particular group—would therefore be superfluous. I trust that he can do so because I have already indicated that I do not propose to move Amendment No. 44A.
	I want to ask my noble friend why the appropriate approvals authority for a quality contract scheme in Wales may approve the scheme if it is satisfied not only that the new public interest test in Clause 19 is met but also if it is satisfied that the scheme is in the public interest. I expect to be told that it is because Wales has a devolved Administration, but I do not think that the public interest is any less important in the rest of the United Kingdom. Indeed, I would point out that Ministers and the Government generally have been consistent in saying that the legitimate interests of bus operators have to be taken into account when the merits of a quality contract are being assessed. In order to do that and to ensure that the benefits of a quality contract are proportionate to the disbenefits, surely it is essential that the QCS board is able to assess fully the financial losses that any operator might incur as the result of a quality contract being introduced, not just the collective position of all operators. Can the Minister confirm that the government amendment which creates new Section 124(1A) of the Transport Act 2000 will oblige QCS boards to assess each operator's financial interest, not just an overall assessment of them all?
	I want also to press the Minister on government Amendment No. 69. As currently drafted, the Bill restricts the scope of an operator's appeal to the Transport Tribunal. Where a QCS board has approved a quality contract or recommendations to change the quality contract have been taken on board by the relevant authority, an operator's appeal can be made only a point of law, not on a point of fact. As far as I can see, this prevents operators appealing to the Transport Tribunal against the assumptions that might have been made by the authority and the QCS board in justifying a quality contract. It also prevents operators making representations to the tribunal on matters taken into account or not taken into account by the authority or QCS board. An operator's only right of appeal to an independent tribunal against an approved quality contract would be his submission to the QCS board on the authority's consultation. I ask my noble friend whether such a procedure actually makes sense and indeed whether it would be defensible in law. Surely there can be no justification for restricting the scope of an operator's appeal to the tribunal, and this amendment therefore removes the restriction currently applied by the amended Bill. It will enable an operator to appeal to the tribunal on a point of law and fact, regardless of the view of the QCS board. This is a further amendment designed to ensure that the legitimate interests of operators are taken into account.
	I apologise for the length of this speech, but it is the only one I intend to make during the passage of this Bill, and these matters are of enormous concern to the bus industry. I turn finally to the question of the invitation to tender to be issued while appeals are outstanding. It is possible, under the terms of the amended legislation, for an authority to proceed to issue an invitation to tender to operators who may wish to bid for a contract to run a quality contract even if an appeal against a quality contract is outstanding. Again, we are in the realms of certain members of the Passenger Transport Executive Group saying, "If there is legislation, so what?". I would point out that legislation of this kind is likely to be protracted and expensive, and that there ought to be a proper justification from PTEG to justify this course of action. Surely it cannot be right for public authorities to proceed with an ITT and all the costs that involves while an appeal is outstanding. If the appeal is successful, all the time and expense of proceeding with the tendering process would be wasted. The position is even more serious if a tender is awarded before an appeal against the particular contract has been won. It is, to say the least, a bizarre arrangement and there appears to be a fundamental lack of common sense and of justice in the procedures as they are presently laid down. It may well be that common sense would prevail and an authority would not proceed to prepare and issue an ITT while an appeal is outstanding, but there is nothing to stop it doing so under the terms of the Bill before us today. By stating expressly that an ITT can be issued even when an appeal is outstanding, the Bill almost encourages local authorities to proceed in that way. The straight question for my noble friend is this: how do the Government propose to ensure that authorities use their powers wisely?
	In conclusion, having taken a deep interest in the Bill and having some years' experience in the bus industry, I cannot say personally that the prospects for companies and bus passengers have been enhanced by the Government's amendments. I hope that the Minister will take it upon himself to give an assurance to bus operators that the last stage of any change in the quality contract will not be made as easy as some, in my view overly optimistic, members of the Passenger Transport Executive Group apparently believe.

Lord Bradshaw: My Lords, I should like to add a few words to the speech of the noble Lord, Lord Snape. I have no financial interest in the bus industry, but I have a lot of experience of it. I want first to reiterate the point I made earlier: traffic congestion is by far the biggest enemy of bus services. Unless there are effective ways of dealing with congestion, bus services will continue to deteriorate.
	Secondly, quality partnerships, where they are working and where they bring bus companies into partnership with the local council and the police, have a lot of virtue in them. In fact, many local authorities have not yet taken up their powers to clear their highways, monitor bus lanes and fine those who invade them. In my opinion, attention to these areas would result in much better bus services than are likely to be brought about by quality contracts. A further point to make on quality contracts is that many people look jealously at London and say, "If we had that system in our city, we would be all right". I ask the Minister to pause and reflect on how much subsidy is put into public transport in London. It is vast compared with that provided outside, and any move along the road to quality contracts outside London will presumably come with a price that I think those who are proposing it intend to present to the Government. That has to be considered.
	London has a huge number of people who arrive in the city by public transport without their cars and therefore use the bus services. Again, that is not the case in every city. Some cities still offer cheap and plentiful parking, and they wonder why the bus services they operate are not efficient—there is obviously a cheap alternative and the cars being driven into those car parks are in fact blocking the roads along which the buses are to operate.
	I am not convinced that anyone has shown that vast profits are being made in the bus industry that could be redistributed through a quality contract to subside less well served or less used areas. Where you can make even a modest profit running a bus service, that will be done commercially. It is only in areas where traffic is very thin that a bus service does not work, and you will not make a sensible adjustment by cutting services in busy corridors where there are lots of people travelling—often quite poor people—and saying to them, "You can have a less good bus service so we can take some of the profits from there to run bus services in the more remote areas".

Lord Rosser: My Lords, I shall comment on a couple of points made by the noble Lord, Lord Bradshaw. No doubt he will strongly disagree with this, but I get the impression that the enthusiasm for the Bill from the Liberal Democrats in this House was considerably less than from the Liberal Democrats in the other place. From reading the debates it seems to me that their support was pretty wholehearted, which cannot be said of the Liberal Democrats in your Lordships' House.

Lord Snape: My Lords, I am sure the noble Lord, Lord Bradshaw, can defend himself, but could the noble Lord, Lord Rosser, not say that the same thing is true of the Labour Party?

Lord Rosser: My Lords, I have made my point about the Liberal Democrats in the two Houses. I suspect that the Bill will be supported by my party in this House as well. Furthermore, I do not accept the argument of the noble Lord, Lord Bradshaw, that quality contracts go with high levels of subsidy. The two are separate issues and one does not necessarily go with the other.
	I am pleased that the Government have accepted the principle behind the amendment. The issue is that, in the event of a quality contract operator defaulting for any reason, a local transport authority must be able to use any means at its disposal to keep bus services running, including operating services itself. Although I listened carefully to what my noble friend said, I remain concerned that the time limits being placed on the operator of last resort are too stringently set out in primary legislation, which is emphatic that while 12 months may be needed, 12 months and one day will not.
	In the Bill, those powers of last resort are restricted to nine months, with an additional three months at the discretion of the traffic commissioner. In the other place, concern was expressed that that was too restrictive, given the wide range of scenarios that could result from an operator defaulting on a franchise. What would happen if a deal with a replacement operator for the franchise fell through at the last minute? What would happen to bus services then? Another scenario could be a franchise deal involving significant investment in new vehicles, to which reference has already been made, but where that programme of investment had not been completed when the initial quality contract operator, or contractor, defaulted. It might be a difficult task for a local transport authority to secure a replacement operator for the quality contract and ensure that the new vehicles were supplied at a competitive price when potential bidders knew that the local transport authority had a fixed period in place whereby it could keep services running as the operator of last resort. That does not seem to place the local transport authority in a strong position in any negotiations.
	There are other possible scenarios, although one accepts that they would be exceptional. The independent or local transport authority might no longer require the use of a particular operator because of poor performance and could be subject to legal challenge. Surely in that situation the challenge might go on for a considerable time. Would any other operator be prepared to touch the provision of services with uncertainty remaining over the status and position of the original quality contract operator?
	What happens if an operator goes out of business 13 months before the end of their contract? What would the position be, then, if the local transport authority could operate services, if necessary, only for 12 months, when the contract itself was going to end after 13? What happens if there is an argument between competing operators and an independent transport authority over the ITA's decision on who should get a contract following the existing operator's defaulting? That, too, might be subject to legal challenge. As I said a moment ago, if a deadline to negotiate on contracts is approaching, considerable power is handed to the bidders when they know that the local transport authority is in the position that it can no longer operate those services after a maximum period of 12 months.
	It is also worth noting that when the Government used their power of last resort in the operating role to take over the operation of south-east trains, following the failure of the Connex South Eastern franchise, I believe that those powers were exercised for almost two and a half years. How would passengers and the taxpayer have fared on south-east trains if the Government had been subject to a fixed time limit set out in primary legislation on their own powers of last resort on rail franchises?
	I realise that the Government are concerned that a local authority might seek to abuse these powers to, in effect, municipalise local bus services, taking them back into public ownership. Even if that were a likely threat, though, under the terms of the amendment the traffic commissioners would provide a safeguard against that, as they would decide whether or not the last-resort powers were to be granted. The Government's guidance to the traffic commissioners could be used to ensure that these last-resort powers could be extended only to protect passengers in exceptional circumstances following the default of an operator and the restarting of the franchise under a new operator.
	I hope that my noble friend will be prepared to consider this amendment. The deadline seems unnecessarily restrictive; it allows no room for manoeuvre if, in exceptional circumstances—and one accepts that they would be exceptional—the specific date could not be adhered to. The amendment would allow the traffic commissioner, if he or she so desired, to agree to an extension. I have no doubt that they would want some compelling reasons for granting an extension rather than seek to use the power that I propose they should have in a way that did not reflect the need for exceptional circumstances to be proved.

Lord Adonis: My Lords, the Government in this House support the Bill with exactly the same degree of enthusiasm as they supported it in the other House—there is no difference between our positions here and there. As was the case in the House of Commons, so here. We pay tribute to the entrepreneurial zeal and public service commitment of so many of our bus operators, in precisely the way that my noble friend Lord Snape would wish us to do. They make a great contribution to public transport in this country and we need them to make a greater contribution in the coming years. We recognise, as my noble friend said, that in a good many areas buses are doing well—London, mentioned by the noble Lord, Lord Bradshaw, being a case in point, where we have seen a welcome transformation for the better in the pattern of bus service usage in recent years. As I said earlier, in some areas buses are not doing as well as we would wish. There are many reasons for that. I recognise the importance of addressing congestion, which the noble Lord mentioned. It is because of these issues that we need to address that we brought forward the provisions in the Bill.
	My noble friend Lord Snape's overriding concern is that the Government should stand by their commitment to protect the legitimate commercial interests of bus operators. We absolutely stand by that commitment. The amendments I am speaking to in this group are designed precisely to ensure that appropriate safeguards are preserved in the interests of bus operators. First, the amendments retain a clear role for independent scrutiny of a local authority's proposals. That scrutiny will take place after the authority has concluded its public consultation process. This is important because it ensures that the quality contract scheme boards can take full account of any concerns raised by operators during the consultation process.
	Secondly, the amendments retain the five public interest criteria already set out in the Bill. These include a requirement that any adverse effects on operators must be proportionate to the benefits of the scheme, which is a crucial safeguard for operators. Thirdly, the amendments retain a right of appeal to the Transport Tribunal.
	To deal with my noble friend Lord Snape's Amendments Nos. 44A and 69A in more detail, the first, on a public interest test, would require QCS boards to consider proposed schemes not only against the five statutory criteria already in the Bill, but also against a more general test of the public interest. The five criteria in the Bill already provide appropriate benchmarks against which any scheme should be judged, and are designed to provide clarity about how the public interest is to be assessed. They require an authority to show that the proposed scheme will, first, increase bus patronage; secondly, will benefit passengers; thirdly, will contribute to the implementation of the authority's local transport policies; and, fourthly, will do so in a way that is economic, efficient and effective. In essence, this means that the scheme must deliver value for money which, in turn, means that the authority needs to take account of all of the costs and benefits likely to arise from the scheme.
	The crucial safeguard for bus operators is the fifth criterion: that any adverse effects on bus operators, both inside and outside the scheme area, must be proportionate to the benefits arising from the scheme. These five criteria make plain, in somewhat more detail than a general public interest criterion, what requirements a scheme needs to fulfil and what questions a QCS board needs to consider. They meet my noble friend's concerns and the legitimate interests of bus operators.

Lord Snape: My Lords, before my noble friend leaves that point, why is the public interest test to be applied in Wales? Why does it not apply in England?

Lord Adonis: My Lords, ours is a better test. Under the devolution settlement, it is of course up to Wales to frame the precise test that it wishes to apply. There would not be much point in devolution if we had to replicate the provisions that the Welsh put in place in every respect. The effect of our tests is to protect the public interest precisely as we would wish to ensure effective bus services, and to protect the legitimate commercial interests of bus operators.
	On my noble friend's Amendment No. 69A, on appeals to the Transport Tribunal, under the amendments made in the House of Commons the grounds for appeal against a local authority's decision to make a quality contracts scheme would depend on whether or not the QCS board had in effect given the final version of the scheme a clean bill of health. Where the QCS board, which will be independent of both central government and the local authorities, has given such a clean bill of health, having examined all the facts of the case and considered all the opinions expressed in the consultation, the Government consider that it is entirely appropriate for the onward right of appeal to the tribunal to be limited to points of law.
	That would enable an appeal to be brought, for example, on the grounds that the authority had acted unreasonably in deciding to make the scheme, had acted with bias, or had fettered its discretion. There would therefore be a clear safeguard in the most unlikely event of a QCS board failing to identify a major flaw in the authority's proposal. It is not correct to say that an operator would, as a general rule, have no right of appeal against an authority whose case for a quality contract scheme was based on unreasonable assumptions. However, where the final version of the scheme had not received a clean bill of health from the QCS board, an appeal could be brought on either points of law or on questions of fact, enabling a full-case review. The Government consider that these proposals provide an entirely appropriate level of protection, while avoiding unnecessary stages in the process, which, after all, could delay the implementation of schemes that are manifestly in the public interest.
	My noble friend asked me specifically why local authorities should be able to issue invitations to tender for quality contracts while an appeal to the Transport Tribunal is in progress. There is no statutory bar to local authorities beginning a tendering process while a judicial review is under way. We see no reason why the position should be different here. Of course, no local authority will be in a position to actually sign quality contracts until any appeals are fully discharged. I emphasise that we are not saying that local authorities must begin tendering during an appeal. Far from it; it would be for the authority to judge whether it would be appropriate in the particular circumstances of the case, bearing in mind the costs that the authority and others are likely to incur during the tendering process.
	My noble friend Lord Rosser's amendment to Commons Amendment No. 122 seeks to provide added flexibility to allow a local authority to continue providing services as operator of last resort, beyond the proposed 12-month period. Nine months should be more than adequate time for an authority to procure a replacement service under a new quality contract. Even so, however, as I set out earlier, our new clause leaves the option to apply to the traffic commissioner for an extension of up to three months in case this should prove necessary.
	The purpose of the amendment is to provide an emergency stop-gap measure for a local transport authority, not to re-establish local authorities as long-term providers of local bus services. The Government consider that a line needs to be drawn somewhere. If a local authority has been trying to find a replacement operator for a whole year and finds itself unable to do so, it is extremely hard to see what is going to change in month 13 or beyond. I therefore hope that my noble friend is persuaded that his amendment is unnecessary. We have given considerable powers and discretion to local authorities to act as operators of last resort where services have not proved viable, or have had to be terminated for any other reason.

Lord Rosser: My Lords, more than one of the possible scenarios that I suggested—I accepted that they would be exceptional—related to legal proceedings being taken over a decision to dispense with the services of a quality contract operator, or as regards an argument between quality contract operators in the independent transport authority over who should take over an existing quality contract after the original operator had ceased to operate the services. Does my noble friend accept that that is a possible scenario, or does he dismiss that possibility? If he accepts that it is a possible scenario involving legal proceedings, does he not accept that those legal proceedings could go on for a considerable period, and that it is therefore not unrealistic to build in a provision which would enable us to go beyond the 12 months where it was proved that there were exceptional circumstances? If we find ourselves in that scenario, what happens the day after the 12 months are up?

Lord Adonis: My Lords, I would rather not paint precise scenarios. It is hard to predict the circumstances in which services might come to a halt. However, if there were to be a scenario of the kind painted by my noble friend of a service coming to an end in circumstances where legal proceedings followed, even by the rather lengthy proceeding standards of our learned friends, one would realistically expect them to have been concluded well within a 12-month period. Therefore, we would not expect such a scenario to justify an extension of the 12-month period. However, I come back to the central point that this is intended to give local authorities the power to act as operator of last resort, not to put in place their own bus services on an ongoing basis. Recognising that we have to make a judgment about a cut-off point at some defined period, our view is that 12 months is the longest period in which one could justify a local authority acting as operator of last resort, and that any local authority which is fulfilling its duties responsibly would be able to put in place a replacement service over that period.
	If a local authority was incapable of putting in place a replacement service in 12 months, it is very difficult to see what circumstance will change in the thirteenth month that is suddenly going to make it possible to act in a way it was incapable of acting in the previous 12 months. Therefore, even in the scenario that my noble friend paints of there being complicating factors surrounding the ending of a bus operation, we believe that the 12-month period is sufficient to put in place successor arrangements, and that we should not need to extend the 12-month period further. On that basis, I beg to move.

On Question, Motion agreed to.
	AMENDMENT NO. 44

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 44.
	Moved, That the House do agree with the Commons in their Amendment No. 44.—(Lord Adonis.)
	[Amendments Nos. 44A and 44B, as amendments to Commons Amendment No. 44, not moved.]

On Question, Motion agreed to.
	amendments NOS. 45 to 68

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 45 to 68.

Moved accordingly, and, on Question, Motion agreed to.
	AMENDMENT NO. 69

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 69.
	Moved, That the House do agree with the Commons in their Amendment No. 69.—(Lord Adonis.)

[Amendment No. 69A, as an amendment to Amendment No. 69, not moved.]
	On Question, Motion agreed to.
	amendments Nos. 70 to 121

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 70 to 121.

Moved accordingly, and, on Question, Motion agreed to.
	AMENDMENT NO. 122

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 122.
	Moved, That the House do agree with the Commons in their Amendment No. 122.—(Lord Adonis.)
	[Amendments Nos. 122A to 122C, as amendments to Amendment No. 122, not moved.]

On Question, Motion agreed to.
	amendments Nos. 123 to 158

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 123 to 158.

Moved accordingly, and, on Question, Motion agreed to.
	amendments Nos. 159 to 162

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 159 to 162. These amendments relate to integrated transport authorities and local road charging schemes. Before dealing with them, I wish to set out again the issues which we are trying to address in Part 5. As I said earlier, in the main urban areas outside London, current transport leadership and delivery arrangements do not always work as well as they might and need updating to reflect changing travel patterns. Current arrangements date from the Transport Act 1968, which allowed establishment of passenger transport authorities with responsibility for public transport across each city. There are now six PTAs covering areas such as the West Midlands.
	In 1985 the power to create further PTAs was repealed, and the broad arrangements for local transport decision-making have remained the same since. However, over the past 20 years there have been many changes in the transport needs and patterns of different areas. Despite this, existing legislation offers little flexibility to update local arrangements, or for one PTA area to do things differently where local needs differ.
	We believe that reviewing existing arrangements is a priority, and that local areas are best placed to identify the changes needed. The Bill changes the generic names of the six passenger transport authorities to integrated transport authorities. This change reflects the wider responsibilities that all ITAs will have in relation to local transport policies and plans, and their powers to act for the economic, social and environmental well-being of their area. The Bill also allows local authorities, both in areas with ITAs and in those without, to review existing arrangements in their area and come forward with proposals for improvements.
	It will be up to the authority in each area to decide how wide a review it wishes to carry out. A review could cover, among other things, how well public transport services operate, the management of roads and the current distribution of powers over transport between local authorities and ITAs. The Bill would then allow the Secretary of State to respond to the proposals put forward by authorities by making individual orders for each area; for instance to establish a new ITA or to make changes to the constitution of an ITA that already exists. These orders would be subject to affirmative resolution in each House.
	Amendments Nos. 159 to 163 are about the membership of integrated transport authorities. These amendments have two principal effects. The first is to guarantee that each of the "representative councils", as defined in the amendments, will appoint at least one representative to the ITA. This supports democratic accountability by ensuring that every part of the area of an ITA must have at least one representative on the ITA, and no part of the ITA's area can be unrepresented. The provisions of the Local Government and Housing Act 1989 will continue to apply to such appointments as they do now. This provides a further safeguard: that the appointment of elected members of a local authority to an ITA reflects the political balance of those councils.
	The second effect of the amendments relates to a potential role for non-elected members of an ITA. The Bill allows the flexibility for non-elected members to be appointed to an ITA—for example, representatives of transport users, businesses and other groups—so long as they will be a minority of the members of the ITA. These amendments provide that such non-elected members may be granted voting rights on the ITA only by the existing voting members of the authority. This will ensure the democratic accountability of the ITA.
	Amendment No. 166 restricts the power to make secondary legislation under Part 5 and makes clear that supplementary provision made under the powers in Clause 86 cannot amend or disapply the political balance requirements contained in the 1989 Act.
	Amendment No. 164 provides that Clause 80 includes the power to delegate functions relating to local road-charging schemes. It also incorporates the safeguard that such functions may be delegated only with the consent of the majority of those authorities whose functions are to be delegated.
	Amendment No. 168 relates to local road-charging schemes. It puts beyond doubt that English local authorities outside London, before making a local road charging scheme, will be required to consult such local persons, and representatives of local persons, as they consider appropriate. The key point is that there must be local consultation. That was a concern of the party of the noble Lord, Lord Hanningfield.
	Amendment No 167 provides that orders made under Part 5 of the Bill, establishing new ITAs or reforming existing ones, will not be subject to "hybrid instrument" procedures in this House. I apologise to the House that this provision was not included in the Bill at its introduction. It is regrettable that the question of hybridity was not raised until after the Bill had passed through the House of Commons. It is all the more important, therefore, that I set out to the House today the compelling reasons that have led us to seek this new provision, given the concerns set out by the noble Lord, Lord Bradshaw, in Amendment No. 167A.
	There are four reasons for the course of action that we propose. First, the Bill, together with the new duties introduced on 1 April this year by the Local Government and Public Involvement in Health Act, provide that orders under Part 5 will receive detailed scrutiny inside and outside Parliament. The order to set up or amend an ITA would be made only after a local area had had the opportunity to review its existing governance arrangements and to develop proposals for reform, in consultation with interested parties.
	Clause 73(10) and Clause 85(4) provide that the Secretary of State must consult relevant local authorities and other parties with an interest before any orders are made. These are two substantive consultation processes, one at local level and the other at national level, which must be conducted before any order can be laid before Parliament. Furthermore, the Secretary of State, before preparing any order, would have full regard to the quality and outcome of local consultation. If proper consultation and reasonable decision-making were not observed at either local or national level, proposals and draft orders would be subject to judicial review. That is all before any order comes to this House and to the House of Commons for an affirmative vote. Therefore, there is no want of transparency, or of consultation, or of power and ability to object, or of checks and balances in the proposals that I commend to the House this evening.
	Secondly, over and above the provisions in the Bill, we will be making explicitly clear in guidance the necessity for local authorities to consult widely with affected bodies and persons in carrying out reviews of their governance arrangements ahead of any proposal for change being submitted to the Secretary of State. This guidance could be a further basis for judicial review if it were not observed and conformity with the guidance will be a key factor in the Secretary of State's judgment on whether local proposals can proceed.
	I emphasise that the Secretary of State's resulting proposals are subject to further statutory consultation. If noble Lords are by now seized of the scale and scope of the consultation that is involved, they are right to be so. Our expectation is that it will take around two years for this process to be complete in respect of each successful ITA scheme.
	Thirdly, I know that there is concern about the precedent that the dehybridity provision may have in terms of the powers and prerogatives of your Lordships' House. Let me address that issue directly. Provisions of a dehybridising nature are not uncommon for secondary legislation dealing with governance issues of the kind that we are considering here. The Delegated Powers and Regulatory Reform Committee specifically says as much in its report on the Bill, when it concludes that the provisions are "not unusual". The committee goes on to say:
	"We draw the disapplication to the attention of the House so the House may satisfy itself that the alternative consultation procedures are an adequate alternative".
	I have dealt with that point at some length and I hope that the House will agree that the alternative consultation procedures are adequate.
	The precedents for the dehybridity provision are recent and relevant. They include the Local Government and Public Involvement in Health Act 2007, covering orders to establish new unitary councils, the Housing and Regeneration Act 2008, in respect of orders designating areas as suitable for development, and the Local Government Act 1992, in respect of orders to change local authority boundaries and establish new authorities. Those provisions are directly comparable with those that I am proposing to your Lordships' House now.
	In respect of the 2007 and 2008 precedents that I have cited, neither was objected to by the Delegated Powers and Regulatory Reform Committee. The committee did not exist in 1992 to comment on those proposals, but in respect of the 2007 precedent, the Local Government and Public Involvement in Health Act 2007, the committee reported in precisely the same way as it reported on the provisions in this Bill. It did not regard the provisions as inappropriate but said:
	"We draw the disapplication to the attention of the House so that the House may satisfy itself that the alternative consultation procedure is adequate".
	Having looked at the Hansard record of the debates both on the Housing and Regeneration Act 2008 and on the Local Government and Public Involvement in Health Act 2007, I can tell noble Lords that there was no objection from either of the parties opposite to those proposals when they came forward in almost exactly the same form as the proposals have come forward in respect of this Bill. Therefore, the dehybridisation provisions in this Bill have good precedents and go alongside robust local and national consultation procedures, which we believe meet the points raised by the Delegated Powers and Regulatory Reform Committee.
	Let me move to my fourth point, which is about why, in this context, we believe that the provisions in Amendment No. 167 are so necessary. After all the consultation that I have set out, which, as I said, could lead to two years of consideration, if an order was ruled hybrid and petitioned against, perhaps by just one interested party, that would extend the length of time needed to approve the order by as much as, on the precedents that we have studied, six months. That would not only substantially delay changes to governance arrangements that enjoyed widespread support locally and had undergone the thorough consultation process that I have just described, but would also add considerably to the expense of bringing proposals forward, introduce uncertainty into the timing of making orders and act as a potentially significant deterrent to the use of powers provided by Part 5 in the first place.
	This would be an especially perverse outcome, as I know that the noble Lord, Lord Bradshaw, and my noble friends wish integrated transport schemes to come forward in appropriate circumstances. They would not, I hope, wish to see a further—and I would argue unnecessary—duplication and complication of consultation and decision-making procedures act to dissuade authorities from coming forward with the very proposals that we are seeking to promote in the first place. For all these reasons, I venture to suggest that the proposal is sensible, proportionate and necessary if we seriously want to see effective integrated transport authorities established in our major urban areas.
	Moved, That the House do agree with the Commons in their Amendments Nos. 159 to 162.—(Lord Adonis.)

Lord Rosser: My Lords, I will speak to my Amendment No. 163B. I welcome the moves that the Government have taken to clarify local authority rights to determine the powers that are available to any non-elected members that are co-opted on to the new integrated transport authorities following local reviews. That is a change since the Bill left this House.
	It is absolutely right that the power should lie with the reformed ITAs to determine whether non-elected members have a voting role to play on their ITAs and what that role should be. However, there is a possibility that the powers given to the reformed integrated transport authorities under the Commons amendments before us today could, in certain limited circumstances, be abused. This issue was discussed at some length in the other place, but I am not sure that the significance of the arguments was fully taken on board.
	I tabled my amendment because I believe that only those integrated transport authority members elected by their constituent councils can properly decide what the powers of non-elected members should be. This is in contrast with the Commons amendment, which requires that the voting members of an integrated transport authority are those that should determine the rights of non-elected members.
	If a political group came to the conclusion that it was likely to lose power on an integrated transport authority, it might be tempted ahead of an election to ensure that it had politically sympathetic non-elected members in place and then to confer full voting rights on those non-elected members to keep it in power after the election, given that the number of non-elected members can be just below 50 per cent of the ITA membership. The voting rights conferred could include the right to determine future voting rights of those same non-elected members. That would surely be a negation of local democracy. The purpose of this amendment is to prevent that from happening by ensuring that the members appointed by the constituent councils could determine at any time the voting rights of the non-elected members.
	If the Minister cannot accept the amendment, I hope that he will be able to give a clear assurance that he will use secondary legislation to prevent the rights of non-elected members from being carried forward from one municipal year to the next, so that elected members have the ability to review voting rights on an annual basis and, in that way, to ensure that local democracy is protected.

Lord Bradshaw: My Lords, I will speak to two amendments in the group, one of which was just spoken to by the noble Lord, Lord Rosser. First, I ask the Minister to give us a clear statement on what is meant by "political balance". Does it mean that the ITA should reflect the votes given for each party in proportion, or does it mean the political balance in each council? The two things are quite different. Secondly, is it proposed to issue any guidance to ITAs on the sort of people whom they should seek to be non-elected ITA members? Thirdly, will he give thought to creating safeguards against an outgoing administration who know that they will not win an election packing the ITA with their friends and, as it were, lumbering the incoming administration with a group of people who will not work with them?
	Amendment No. 167 is on hybridisation, which is a complicated subject. The Minister emphasised the delay that would be occasioned by coming to the Chairman of Committees, who would rule whether the governance order was hybrid. Then this House would proceed quickly through hearing an aggrieved party; it might be an authority that does not want to be part of the ITA. When such a party has the opportunity of coming to Parliament, the House of Lords would convene its Hybrid Instruments Committee. The party has to have sufficient standing; it has to be someone who is protesting not just for old times' sake, but from a point of proper locus standi.
	I take the Minister back to the passage of the West Northamptonshire Development Corporation (Area and Constitution) Order 2004, which I am certain is not at his fingertips. It was dealt with rapidly in this House. Five groups of petitioners were found to have standing, including a local authority, the Campaign to Protect Rural England, a group of individuals and two campaign groups. However, the report of the Select Committee was published two weeks after the hearings, so there was no delay in this House.

Lord Adonis: My Lords, it may surprise the noble Lord to know that I have that precedent here and I do not believe that it supports his case at all. The West Northamptonshire Development Corporation (Area and Constitution) Order 2004 was laid before Parliament on 13 May 2004. The order was not referred to a Select Committee until 7 September because of the processes that had to be gone through. The committee began its consideration on 25 October. It sat for seven days, visited Northamptonshire on 3 November, announced its decision on 4 November and published its recommendations on 17 November. By my calculations, the time between the order being laid and the final process having been gone through is precisely six months and four days, which supports the point that I made earlier. He is referring simply to the time for which the committee itself sat, but that is only a small proportion of the total time involved in going through the hybridity requirements laid down by the procedures of the House.

Lord Bradshaw: My Lords, I still believe that what the Minister is proposing is a negation of the proper democratic rights of the people of this country to come to the House of Lords and to present the case that they may have against an order. The Minister will know—and he will probably gain considerable experience of the way in which affirmative orders are dealt with in this place—that there is usually no way that such orders ever get voted against. This procedure would allow people to have their say. Therefore, I would defend it as being superior to the affirmative procedure, which no doubt government officials would like to put in place because they like nothing better than to have everything organised. Occasionally, the interests of democracy are best served by allowing the people to approach Parliament and to have their say.

Lord Hanningfield: My Lords, I am slightly confused by the last part of this debate. Let me return to the amendment put forward by the noble Lord, Lord Rosser. I have been in local government for a long time and I know that there can be gerrymandering before elections. It is important that the democratic results of an election are reflected in the membership of ITAs, so I share some of the concerns expressed by the noble Lords, Lord Rosser and Lord Bradshaw. I know that this will be referred to in secondary legislation, so I hope that the Minister can give us some reassurance on that point. On hybridisation, I have a lot of sympathy for what the noble Lord, Lord Bradshaw, was saying, but I have become more confused about it as a result of the timescales that the Minister has put forward and the delays that this might cause. I, too, support the democratic process through which people have a right to present their case to us, but perhaps the Minister might clarify how he can help this situation.

Lord Adonis: My Lords, first I will deal with the fears raised by my noble friend Lord Rosser about the gerrymandering of the membership of an ITA by means of the granting of voting rights on an inappropriate basis to non-elected members. The Government moved Amendment No. 166 to ensure that the political balance rules that apply under the Local Government and Housing Act 1989 cannot be amended or disapplied by supplementary provision in an order under Part 5. Section 15 of the Local Government and Housing Act 1989 sets out the principles by which appointments to bodies such as ITAs are to be governed. Among other things, the effect of this is that when political composition of the representative councils on a relevant local authority body changes, for example at a local election, the duty on those authorities is to review the membership as soon as is practicable thereafter to ensure that the principles of political balance are correctly maintained.
	In addition, Clause 89 allows the Secretary of State to issue guidance on, among other things, the carrying out of governance reviews and the membership and constitutional arrangements for ITAs. A draft of this guidance was issued in December 2007 and is currently being revised. We intend to use the guidance to underline a series of principles in relation to the appointment and granting of voting rights to non-elected members of ITAs, which meet the concerns raised by noble Lords.
	These include, first, that where persons other than elected members have been appointed to an ITA, the elected members of that ITA should review periodically whether and on what issues the non-elected members are entitled to vote. This would apply most obviously where there have been changes to the elected membership of an ITA after local council elections. Secondly, voting rights for non-elected members can be withdrawn in appropriate circumstances as well as granted. Thirdly, any limitations on the right of appointed members of an ITA to vote and the circumstances in which the entitlement to vote might come to an end should be clearly set out in any resolution giving them an entitlement to vote.
	In response to my noble friend Lord Rosser, I stress that the elected members of an ITA can revisit an earlier decision of theirs to grant voting rights to one or more non-elected members. That is clearly supported by Section 12 of the Interpretation Act 1978 which makes it clear in relation to powers conferred on bodies through legislation that,
	"it is implied, unless the contrary intention appears, that the power may be exercised ... from time to time as occasion requires".
	The clear implication is that the power for an ITA itself to confer voting rights on non-elected members is not a one-off power that, once exercised, cannot be amended or reversed. I think that meets my noble friend's concerns on the status of non-elected members and any voting rights which may be conferred on them.
	In response to the argument of the noble Lord, Lord Bradshaw, on the hybridity procedures, I believe I set out the fullest possible explanation about why we regard these proposals as necessary. The noble Lord, Lord Hanningfield, wished to be satisfied that there were good precedents for what we are doing and that we had adequate processes of consultation in place. I can reassure him on both points. The Bill already provides that there should be detailed scrutiny, both at local and national level, before any orders are made in respect of an ITA. We shall be issuing guidance on the type of consultation that will be required. The Secretary of State will have full regard to the quality and outcome of a local consultation before making any orders at national level and, of course, if proper consultation and reasonable decision-making are not observed, either at local or national level, proposals and draft orders could be subject to judicial review. That is an elaborate and very thorough process of consultation, which I believe meets the full, legitimate expectations that one can have of the decision-making process set out by the noble Lord, Lord Bradshaw.
	On the precedents, the noble Lord, Lord Bradshaw, did not answer the points I made. There are clear precedents for this action, not only in the recent past but in the very recent past, in the Local Government and Public Involvement in Health Act 2007, in the Housing and Regeneration Act 2008, both of which have provisions which are almost identical to the provisions we are proposing in the Bill, and in the Local Government Act 1992, in respect of orders to change local authority boundaries and establish new authorities, a situation very similar to that in which we envisage proposals being brought forward in respect of ITAs.
	Not only are those precedents, but they are precedents of proposals which were not opposed by either of the other parties. There is a good and, to my mind, sufficient reason for bringing this proposal to the House: we do not regard it as reasonable and over and above the extensive consultation requirements before orders in respect of an ITA can be made at national and local level, that there should be a further process which could be gone through in this House. That would only duplicate previous consultation processes, delay the decision-making process and, crucially, make it less likely that proposals in respect of ITAs will come forward in the first place, which is the very purpose that this Bill seeks to serve and which, I believe, has widespread support across the House.

On Question, Motion agreed to.
	Amendment No. 163

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 163.
	Moved, That the House do agree with the Commons in their Amendment No. 163.—(Lord Adonis.)

[Amendments Nos. 163A and 163B not moved.]
	On Question, Motion agreed to.
	Amendments Nos. 164 TO 166

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 164 to 166.

Moved accordingly, and, on Question, Motion agreed to.
	Amendment No. 167
	Clause 87, page 74, line 6, at end insert—
	"(3) If, apart from this subsection, an instrument containing an order under this Chapter would be treated for the purposes of the standing orders of either House of Parliament as a hybrid instrument, it shall proceed in that House as if it were not a hybrid instrument."

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 167.
	Moved, That the House do agree with the Commons in their Amendment No. 167.—(Lord Adonis.)

Lord Bradshaw: moved, as an amendment to the Motion that this House do agree with the Commons in their Amendment No. 167, leave out "agree" and insert "disagree".

Lord Bradshaw: My Lords, I have spoken to this amendment with Amendment No. 159. I believe that the Minister has exaggerated the extent of the delay because there is a certain parallel movement in these procedures. In fact, it could be possible to accommodate our hybrid instruments procedure within the 12-month timeframe that the Government contemplate will be needed between the publication of the ITA governance review scheme by an ITA or local authority, and the making of the resulting ITA order by the Secretary of State. I beg to move.

On Question, Whether the said amendment (No. 167A) shall be agreed to?
	Their Lordships divided: Contents, 43; Not-Contents, 87.

Resolved in the negative, and amendment disagreed to accordingly.
	On Question, Motion agreed to.
	AMENDMENT NO. 168

Lord Adonis: moved Amendment No. 168:
	Clause 104, page 81, line 38, at end insert—
	"(1A) For subsection (1) substitute—
	"(1A) Where the charging authority or any of the charging authorities are—
	(a) a local traffic authority for an area in England, or(b) an Integrated Transport Authority,that authority or those authorities (acting alone or jointly) must consult such local persons, and such representatives of local persons, as they consider appropriate about the charging scheme.
	(1B) In subsection (1A)—
	"local persons" means any persons who are likely to be affected by, or interested in, the making of the scheme;
	"representatives" means any persons who appear to the charging authority or charging authorities to be representative of local persons.
	(1C) In any other case, the charging authority or the charging authorities (acting jointly) may, at any time before an order making, varying or revoking a charging scheme under this Part is made, consult such persons as they consider appropriate about the charging scheme, variation or revocation."."
	On Question, amendment agreed to.
	AMENDMENTS NOS. 169 TO 173, 178 AND 179

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 169 to 173, 178 and 179.
	Amendment No. 169 relates to the New Roads and Street Works Act 1991. Government policy is to encourage efficient and effective working in the highway, with works properly co-ordinated by the highway authority. Key to that is the need for the authority to be given notice of works in its highways carried out by undertakers, whether they are placing, maintaining or removing apparatus in or below the highways or consequential works—for instance, carrying out a permanent reinstatement as a separate phase or works to remedy a failure to complete a reinstatement to the correct standard in the first place. All occupy the highway and impact on our crowded roads and, as I know from my one month in this job, are matters of acute concern to the public and to Members of your Lordships' House.
	Following a judgement by the Divisional Court last November, there is a lack of legal certainty about what works are required for or incidental to placing, maintaining or removing apparatus, and fall within the definition of street works. The amendment is intended to confirm the existing view and practice that "street works" includes reinstatement or remedial works and remove that uncertainty.
	Amendment No. 170 relates to the Traffic Management Act 2004. Government policy is to encourage local authorities to take over from the police service the enforcement of parking restrictions. When a local authority does that, police resources are released for more serious matters. It also means that a single body—the local authority—is responsible not only for developing parking policies, but for enforcingthem. The parking components of Part 6 of the Traffic Management Act 2004 came into force on 31 March this year.
	Despite comprehensive consultation and scrutiny, it subsequently came to light that the definition of "local authority" in the Traffic Management Act, read with other provisions of that Act, means that shire district councils may not be able to make full use of the new enforcement powers in their off-street car parks or in relation to any free on-street parking they authorise. The anomaly has no impact in relation to enforcement by London boroughs, unitary authorities or metropolitan district councils nor does it in any way affect the enforcement of yellow bands or pay-and-display restrictions.
	Furthermore, the department considers that parking attendants appointed before 31 March under provisions of the Road Traffic Regulation Act 1984 are unaffected by the anomaly. However, to enable shire councils to continue to enforce off-street controls and appoint sufficient numbers of parking attendants to do so,, the department also introduced temporary amending regulations under the Traffic Management Act. Provided that the amendment is accepted, the amending regulations will no longer be necessary and can be revoked.
	Amendment No. 170 makes clear in primary legislation for the long term that a shire district council has the power to appoint the civil enforcement officer who would serve the penalty charge notice to the motorist who has parked in contravention of the parking regulations in a local-authority-owned, off-street car park. Amendment No. 170 also makes minor amendments to other provisions of Part 6 of the Traffic Management Act to make sure that council waste-collection vehicles operated by non-metropolitan district councils are exempted from restrictions on double parking and parking at dropped kerbs, as originally intended under those provisions. Finally, the amendment makes it clear that guidance issued on parking will have statutory force in relation to non-metropolitan district councils.
	Amendment No. 171 amends the definition of conditional offers in Section 90F of the Road Traffic Offenders Act 1988 so that it refers also to conditional offers made by the Department for Transport's vehicle examiners in Scotland. The amendment is needed to ensure that the provisions inserted by the Road Safety Act 2006 into the Road Traffic Offenders Act work as originally intended. Unfortunately, when the Road Safety Act provisions were drafted, the definition of conditional offer in this context was not amended to include conditional offers issued by VOSA's vehicle examiners in Scotland. Unless this deficiency is corrected, it will undermine the scope for VOSA's vehicle examiners to take effective enforcement action against foreign vehicle operators while operating in Scotland. This error was only identified recently in the finalising of secondary legislation and the Local Transport Bill provided a useful opportunity to make this minor technical amendment.

On Question, Motion agreed to.
	Amendment No. 174

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 174.

Moved accordingly, and, on Question, Motion agreed to.
	Amendments Nos. 175 to 179

Lord Adonis: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 175 to 179.

Moved accordingly, and, on Question, Motion agreed to.

Constitution: Executive, Judiciary and Parliament (Constitution Committee Report)

Lord Goodlad: rose to move, That this House takes note of the report of the Constitution Committee on Relations Between the Executive, the Judiciary and Parliament (6th Report, Session 2006—07, HL Paper 151).

Lord Goodlad: My Lords, the report sought to assess the evolving constitutional relationships between the Executive, the judiciary and Parliament, and made recommendations both to Government and the judiciary. The follow-up report, published on 10 October 2008, analyses the responses of the Government and the judiciary to the report. The committee was chaired by the late Lord Holme of Cheltenham who is remembered by your Lordships' House and by the committee with respect and gratitude, and in my own case, with great personal affection. Your Lordships' committee was greatly assisted by the specialist advice of Professor Andrew Le Sueur and by the clerks.
	I appreciate the Government finding time for this debate in a very busy Session, and I am particularly grateful to the Lord President of the Council for being present to respond to the debate. It was right to hold the debate in the present Session rather than wait for two months for the Government to respond to the follow-up report.
	It is a matter for regret that the noble and learned Lord, Lord Woolf, is absent on duties in the Court of Final Appeal in Hong Kong, and that the noble and learned Lord, Lord Lyell of Markyate, is also detained by duties elsewhere. Both noble and learned Lords made distinguished contributions to the reports and would have wished to participate in the debate today. The noble and learned Lord, Lord Goldsmith, is also prevented by other duties from contributing to the debate as he had originally intended.
	The report of your Lordships' committee made a series of recommendations to both the Government and the judiciary. It referred to the impact of the Human Rights Act 1998, the Constitutional Reform Act 2005, and the Ministry of Justice, which was created in the course of our inquiry. It also emphasised the importance of the Lord Chancellor fulfilling his or her duty to defend the independence of the judiciary—recognised by Section 3 of the Constitutional Reform Act 2005—by ensuring that Ministers do not impugn individual judges, and restrain and reprimand those who do. It recommended the inclusion in the Ministerial Code of strongly worded guidelines setting out the principles governing public comment by Ministers on individual judges.
	Your Lordships' committee was critical of the Government's handling of the creation of the Ministry of Justice and recommended a transparent process for setting the budget of Her Majesty's Courts Service, with appropriate judicial involvement. Other recommendations to the Government included the status of the Lord Chancellor, the involvement of the Law Officers in policy-making and legislative drafting, and the possible use of advisory declarations by the courts to rule on whether recently enacted legislation is compatible with the Human Rights Act.
	The report also examined the judiciary's channels of communication with the media and the public, and criticised some of the media for what was seen as irresponsible coverage of judicial decisions. It concluded that the senior judiciary should act more quickly to explain judicial decisions in controversial cases, and that consideration should be given to appointing one or more spokesmen, with appropriate qualifications and legal experience, who would be permitted to speak to the media with the aim of securing coverage that accurately reflects the judgment or sentencing decision. Your Lordships' committee considered the appearance of judges before Select Committees, the role of the Lord Chief Justice and his annual report, and the interaction of individual judges and the media.
	In October 2007, the Government published their response to the report, and the Lord Chancellor, Jack Straw, appeared before the committee. The Judiciary also provided a response that month—the first response by the judiciary to a committee of Parliament. The then Lord Chief Justice, the noble and learned Lord, Lord Phillips of Worth Matravers, subsequently gave evidence to the committee on two occasions.
	Your Lordships' aim in publishing the follow-up report has been to analyse the responses by the Government and the judiciary, and to assess such progress as has been made since the original report. The report would have been published sooner but the committee wanted to hear the reaction of the noble and learned Lord, Lord Phillips of Worth Matravers, to the framework document for HMCS and to complete the correspondence with the Editors' Code of Practice Committee of the Press Complaints Commission.
	In its report, under the heading, "Ministers and Judges", the committee discussed reaction to the Sweeney case. The then Home Secretary, John Reid, attacked the minimum tariff sentence as "unduly lenient". Vera Baird MP, the then Parliamentary Under-Secretary at the DCA, also publicly criticised the sentence. Your Lordships' committee found that the,
	"then Lord Chancellor, had failed to fulfil his duty to ensure that ministers do not impugn individual judges and to restrain and reprimand those who do and that the senior judiciary could",
	and should,
	"have acted more quickly to ... the unfair press coverage that followed the sentencing decision".
	The committee recommended that the Ministerial Code should be amended,
	"so that it gives clear and unambiguous guidance to ministers about how they should or should not comment about judges in public",
	and has made a commitment to reviewing the issue after the Government next update the code.
	I shall not delay your Lordships with further debate about the creation of the Ministry of Justice. It is sufficient to say that lessons have, we hope, been learnt about involving the Lord Chancellor and the Lord Chief Justice at a sufficiently early stage of the policy-making process,
	"in the event of constitutional reforms or 'machinery of government' changes impacting ... on the judiciary".
	On Her Majesty's Court Service, the noble and learned Lord, Lord Falconer of Thoroton, the then Lord Chancellor, and the noble and learned Lord, Lord Woolf, the then Lord Chief Justice, agreed a concordat in 2004, which set out the division of responsibilities between the Lord Chancellor and the Lord Chief Justice. Your Lordships' committee expressed its concern in the follow-up report that this document had not been amended to reflect the new arrangements for Her Majesty's Court Service. I hope that the Lord President of the Council will find it possible to address this issue in her response. In the view of the committee, a practice should be established to amend the concordat whenever necessary to ensure that it remains a relevant and binding document.
	In the follow-up report, the committee recommended:
	"The posts of Lord Chancellor and Secretary of State for Justice should continue to be combined in future".
	Again, you Lordships will wish to hear the views of the Lord President of the Council, as opinions vary greatly on this point. The follow-up report assesses issues relating to the response by the judiciary to the first report. The response by the judiciary was its first ever given to a parliamentary Select Committee and we are grateful for that.
	I turn now to the accountability of the judiciary. The committee sought to ascertain how, under the new constitutional arrangements, the judiciary could remain accountable in what one of our witnesses termed the,
	"explanatory role in the sacrificial sense".
	The committee concluded that Select Committees have an important role to play through the questioning of senior judges in public and welcomed the decision of the Judicial Executive Board that the Lord Chief Justice should lay an annual report before Parliament. The judiciary's response acknowledged the need for accountability in respect of their administrative duties, but expressed concerns about the frequency of judges' appearances before Select Committees and the topics that should or should not be discussed. The committee understands these concerns, but reserves the right to call judges to give evidence whenever necessary and to ask about issues as appropriate. The position of judges will of course be respected, and speaking personally, I do not envisage any difficulties in the foreseeable future in this area.
	Since the publication of the Lord Chief Justice's first annual report, the noble and learned Lord, Lord Phillips of Worth Matravers, and Sir Igor Judge—now the noble and learned Lord, Lord Judge—have suggested that the Lord Chief Justice might not produce a report on a strictly annual basis. The committee believes that such a report would be an effective way for the judiciary to be accountable and hope to see it published on an annual basis.
	I turn to communications by the judiciary. The committee assessed the way in which the judiciary communicates with the media and the public, and concluded that the Judicial Communications Office should give consideration to appointing one or more spokesmen with appropriate qualifications and legal experience who would be permitted to speak to the media with the aim of securing media coverage that reflects accurately judgments and sentencing decisions. The judiciary has now appointed five judges to act as spokesmen where appropriate.
	I turn to advisory declarations. In the report, the committee considered whether the courts could, in appropriate cases, provide greater guidance on the compatibility or otherwise of proposed or recently enacted legislation with the Human Rights Act. The noble and learned Lord, Lord Phillips of Worth Matravers, told us in oral evidence that he was open to this proposal. I hope that the Government too have an open mind on whether, in appropriate cases, seeking an advisory declaration might be beneficial. Perhaps the noble Baroness will have words to say on this.
	Finally, I wish to address relations between the judiciary and the media. The committee believes that the media, especially the popular tabloid press, all too often indulge in distorted and irresponsible coverage of the judiciary, treating judges as fair game. A responsible press should show greater restraint and desist from blaming judges for their interpretation of legislation which has been promulgated by politicians. If the media object to a judgment or a sentencing decision, the committee suggests that they focus their efforts on persuading the Government to rectify the legal and policy framework. In order to ensure more responsible reporting, the committee recommends that the Editors' Code of Practice, which is enforced "by the Press Complaints Commission" be regularly updated to reflect these developments.
	In the follow-up report, the committee published correspondence with the Press Complaints Commission and the Editors' Code of Practice Committee, which reviews the editors' code of practice. Your Lordships' committee does not seek to restrict press criticism of judges, but calls for an end to inflammatory and misleading coverage of specific judgments to which judges are not allowed to respond. In a recent article the distinguished journalist Joshua Rozenberg, whose every word merits study by everyone in Parliament, called, in this context, for the "application of common sense". He did not proceed to say how rare common sense is.
	The Select Committee does not believe that the points made in reports are adequately covered by the editors' code of practice and expects to see an outcome to the Editors' Code of Practice Committee's deliberations that will respond to your Lordships' committee's concerns. I have every confidence in the judgment and resolution of Sir Christopher Meyer, the chairman of the Press Complaints Commission, with whom I was at university. The Minister's view on these matters would be very welcome.
	If it is the will of the House, the committee will continue to scrutinise these issues, particularly the work of the Ministry of Justice, the Lord Chancellor and the Lord Chief Justice, and the accountability of the judiciary. I beg to move.
	Moved, That this House takes note of the Report of the Constitution Committee on Relations between the executive, the judiciary and Parliament (6th Report, Session 2006-07, HL Paper 151).—(Lord Goodlad.)

Lord Lester of Herne Hill: My Lords, we are grateful to the noble Lord, Lord Goodlad, for introducing this debate on two important reports, the original report chaired by Lord Holme of Cheltenham, whose untimely death has robbed us of a wise constitutional reformer, and the follow-up report of the noble Lord's committee. The Constitution Committee is a significant innovation and I hope it will become a much needed public watchdog and guardian of the British constitution.
	It is a special pleasure to take part in a debate in which the noble Lord, Lord Pannick, makes his maiden speech. He is a close personal friend, an outstanding public law advocate and a star of Blackstone Chambers, to which we both belong. He is also a notable Times columnist and has just published a Christmas book, a collection of his articles about the quirks and oddities of unpersuasive advocates, injudicious judges and legal entertainment. His wit, as well as his forensic acumen and refreshing lack of political correctness, will enliven our proceedings. His contribution as a distinguished lawyer will be especially valuable as the Law Lords become judges of the Supreme Court on the other side of Parliament Square.
	When I was young in this House I remember being rebuked by the noble Lord, Lord Campbell of Alloway, for making a serious point after the dinner hour. I hope I shall be forgiven, particularly by the Leader of the House, if I do so now. Two weeks ago, I resigned as independent unpaid adviser to the Justice Secretary on aspects of constitutional reform. I did so with regret because it became apparent that I could not agree with what was being proposed for the Constitutional Renewal Bill and a Bill of rights and responsibilities. We must await publication of the Government's proposals, but meanwhile I shall briefly explain where I stand on issues affecting the relations between the three branches of government.
	Many of my views were set out in my Constitutional Reform (Prerogative Powers and Civil Service etc.) Bill, which was given a Second Reading in March 2006. With expectations raised by the Governance of Britain Green Paper, I hoped, when agreeing to act as independent adviser, that the thrust of those proposals would find favour in a Government ambitious to move further towards a coherent and enduring constitutional settlement of the relations between the three branches of government and the individual. Instead, I am afraid that what will be offered will be weak measures, tinkering at the edges of much needed constitutional reform.
	In brief, my Bill proposed transferring the source of prerogative powers to Parliament; putting the principles governing parliamentary scrutiny of treaties and war powers on a statutory footing; defining the fundamental principles underlying appointments to, and operation of, the Civil Service; preventing special advisers from managing, directing or issuing instructions to a civil servant in the discharge of public functions; providing an express duty for civil servants and special advisers to act with honesty and integrity; giving British citizens the right to a passport and to freedom of movement to and from this country; and creating the office of Commissioner for Public Appointments to advise on appointments to some major public offices, and setting up a Parliamentary Appointments Committee to approve them.
	Prerogative powers are a necessary incident of government. However, as the Law Lords held in the Chagos Islanders' case a couple of weeks ago, it is anomalous that the Crown is able, through the Queen's Ministers, to exercise public powers without parliamentary authority. It is an anomaly that could readily have been removed by the forthcoming Bill.
	As a result of what happened to the Attorney-General's advice before the invasion of Iraq and the blocking of the BAE inquiry, I also hoped that the Constitutional Renewal Bill would remove the inherent conflict of interest in the office of Attorney-General, so that the chief legal adviser to the Government would not also be a serving politician and Minister. I also hoped that the Justice Secretary would abandon his attempt to seek the power to interfere with the crucial independence of the Judicial Appointments Commission by imposing targets or giving directions. The JAC is an essential guardian of judicial independence and the rule of law, and should not be given directions by the Justice Secretary. I also hoped that the Government would take the opportunity of the Constitutional Renewal Bill to strengthen human rights, at least by overruling the majority ruling of the Law Lords in the YL case that narrows the reach of the Human Rights Act in relation to private bodies exercising functions of a public nature—a matter requiring urgent attention by Parliament; by including a right to good governance and administrative justice; and by including a constitutional principle of equality before the law and the equal protection of the law, codifying a common law principle.
	We must await publication of the Government's proposals and the response to the powerful report of the Joint Committee on Human Rights on the Bill of Rights to see how they will face these important constitutional issues. Proposals for a Bill of rights and responsibilities, side by side with the Human Rights Act, would be worth while only if they added real, practical value to existing law and provided reasonable legal certainty.
	The Constitution Committee's original report rightly emphasised that:
	"The integrity of the legal system depends on it being properly funded ... we do urge the Lord Chancellor to ensure that it receives maximum protection from short-term budgetary pressures upon and within the new Ministry".
	The right of access to courts in civil as well as criminal proceedings is a fundamental constitutional right protected by the common law and Article 6 of the convention. The Courts Service has agreed to save £145 million and the tribunal system has agreed to save £73 million in the next three years. These cuts are likely to impair the ability of the courts and tribunals to maintain an effective system, especially as they have a direct effect on levels of staffing and computer systems.
	The Government's full-cost recovery policy, unique in the common law world, and changes to the legal aid system do not adequately protect the right of access to justice. Changes in the funding of cases involving children at risk may mean that local authorities will not be able to afford to bring the statutory proceedings needed to protect children. The dramatic increase in fees for such cases has already led to a drop in the number of childcare cases brought by local authorities, and members of the judiciary and family lawyers have warned that this may increase the numbers in danger of suffering domestic abuse. The same applies to effective legal protection against forced marriages threatened by these funding cuts. Legal aid has already been cut for both criminal and family cases and there are rumours of further cuts for civil cases. This also seriously impedes the right of access to the courts, as does the closure of so many community law firms.
	The Constitution Committee's original report published the evidence given by the editor of the Daily Mail, Paul Dacre, who is also chair of the Press Complaints Commission's code of practice committee. In his evidence Mr Dacre expressed his and his newspaper's hostility to the Human Rights Act because of the role it gives to the courts to protect the convention right to personal privacy.
	Mr Dacre returned to the attack in his recent speech at the Society of Editors' conference. I agree with much of what he said about the abuse of conditional fee agreements by claimants' lawyers in libel cases, unnecessary restrictions on public access to freedom of information and libel tourism, but his attacks on the Human Rights Act are misconceived and unfair.
	I have acted for the press in a number of cases where the convention right to free expression—now made part of our law via the Human Rights Act—has been successfully used to combat unnecessary restrictions in English statute and common law. Yet the Daily Mail and some other sections of the British media have been unremitting in their daily attacks on the Human Rights Act because of their opposition to any legal restraints on excessive media intrusion. They do not give credit to the judiciary for the careful way in which it has interpreted and applied convention rights, and they do not accept that a fair balance has to be struck between the right to free expression, the right to a good reputation and the right to personal privacy. They do not recognise that even in the United States—the land of the First Amendment—there are effective legal safeguards of personal privacy, or that the Human Rights Act, and its specific recognition of the paramount importance of freedom of expression, gives them and the public necessary protection. They attack the British judiciary whose decisions are more favourable to free speech than some recent and troubling decisions of the Strasbourg Court. They do not understand that, without the constitutional protection given by the Human Rights Act, the threat to freedom of expression would significantly increase.
	I congratulate the noble Baroness, Lady Buscombe, on her appointment as chair of the Press Complaints Commission, and hope that she will be able to convince Mr Dacre and others of the need to make the PCC stronger and independent, and to make self-regulation more effective in deterring abuse and giving effective remedies. If she is unable to do so, a future Parliament will surely intervene and the outcome may not be what Mr Dacre or I would welcome.

Lord Pannick: My Lords, it is a great honour to speak in this House for the first time. In the two weeks since my introduction, I have spent a lot of time listening, watching and, indeed, eating in this House. I am very grateful to noble Lords for the warmth and the generosity of the welcome that I have received and I am extremely grateful to all members of staff for the considerable help that they have given me.
	I am particularly pleased to be speaking in this House on the important subject of the relationship between the Executive, the judiciary and Parliament. I declare an interest. For the past 28 years I have practised as a barrister. My first case was not a success; my client was hanged. He was a drug trafficker from Singapore whose appeal was dismissed by the Judicial Committee of the Privy Council. My record could only improve after that.
	I mention that first case because in it, as in many others thereafter, I had the very good fortune to be junior counsel led by the noble Lord, Lord Lester of Herne Hill. Therefore, it is appropriate that I should follow him in this debate. I thank him for his kind words about me. Over the years, I have heard in court almost as many excellent speeches by the noble Lord as have been heard in this House, although the speeches that I have previously heard from him have occurred rather earlier in the day.
	In the past 20 years I have frequently appeared in court defending Ministers, sometimes successfully, against allegations that they have acted unlawfully. I want to make four points arising out of the excellent reports of your Lordships' committee that we are debating tonight. The first is that my experience of representing Ministers is that, with very rare exceptions, they respect the independence of the judiciary and recognise the importance of doing nothing to undermine the rule of law. They seek advice on the legality of their conduct, they follow it and they take their legal medicine, even when courts find that they have acted in an unlawful manner. Section 3 of the Constitutional Reform Act imposes a duty on all Ministers of the Crown, not just the Lord Chancellor, to,
	"uphold the continued independence of the judiciary".
	In my experience, with very rare exceptions, Ministers understand that and comply.
	My second point is that there is nevertheless a tension between Ministers and judges. That is inevitable. Judges are deciding the legality of policy issues of great importance and sensitivity. Every Government of recent times have experienced unwelcome defeats in court that have caused disappointment and concern to Ministers; there is nothing new about this. The noble and learned Lord, Lord Woolf, wrote about his experience in the 1970s as Treasury devil, or Crown counsel. Burnt on his heart, as the noble and learned Lord described it, were the names Laker, Tameside and Crossman—a few of his defeats when acting for the Government in politically controversial cases. It is inevitable that these disagreements between judges and Ministers will arise and it is inevitable that they will cause tension. The only societies in which there are no tensions between judges and Ministers are those where the Government always get their way.
	Some years ago, I acted for a foreign Government involved in litigation in the English courts. One of its representatives asked me, before the court case, whether it was true that the Government of this country were intervening in the legal proceedings to support my client, the foreign Government. I confirmed that this was so: yes, the British Government were intervening to support the foreign Government. How, then, could it be, I was asked, that I was worried about our chances of success in court?
	In a free society, tensions between the judiciary and the Executive are a confirmation of the vibrancy and vigour of the rule of law. Government and judges must, of course, have mutual respect for the distinct and valuable constitutional roles that each of them is performing. However, in a free society, government and judges will not, and cannot, always see eye to eye.
	My third point concerns ministerial criticism of judicial decisions. Of course, I agree with the powerful criticisms made by your Lordships' committee of the inappropriate comments made by the then Home Secretary on the Craig Sweeney case. I also agree that Ministers should be slow to comment on judicial decisions, particularly decisions involving government departments. As the noble and learned Lord, Lord Irvine of Lairg, said as Lord Chancellor in 2003:
	"Maturity requires that when you get a decision that favours you, you do not clap. And when you get one that goes against you, you don't boo".
	Those were wise words, in my view. The noble and learned Lord's comments were widely understood as a well deserved rebuke for the then Home Secretary's criticisms of judges who had ruled against the Government on asylum law.
	But noble Lords will not wish to suggest that Ministers may never express a criticism of judicial decisions, however well reasoned and well informed the criticism may be and however moderate the language in which the criticism is expressed. Ministers, by reason of their constitutional position, have a special responsibility to ensure that any criticism by them of judicial decisions is well reasoned and expressed in moderate language, but I do not think that judges should be protected, need to be protected or indeed want to be protected from well informed criticism by politicians or from anyone else. Ministers should not be placed in a special class of disadvantaged persons unable to comment critically on judicial decisions. Indeed, given their responsibilities, Ministers will sometimes need to comment critically on judicial decisions to explain why they are bringing an appeal or considering a change in the law.
	My fourth and final point concerns the means by which ill informed criticism of judges should be answered. Good judges welcome constructive criticism, but every so often judges are subjected to unjustified criticism, which may, unless answered, damage the reputation of the judiciary. A recent example was the well publicised speech given last week by Mr Paul Dacre, the editor of the Daily Mail, mentioned by the noble Lord, Lord Lester. Mr Dacre accused Mr Justice Eady of,
	"an animus against the popular press".
	Mr Dacre suggested that the judge had created a privacy law,
	"with a stroke of his pen",
	by "arrogant and amoral judgments".
	Noble Lords will, I am sure, agree that there was no justification whatever for these personalised criticisms of Mr Justice Eady, who was performing his duty to apply the Human Rights Act, which includes a legal right to the protection of private life. Now is not the time to debate the merits of a law protecting privacy. I should declare an interest on that topic, as I act for Mr Max Mosley in relation to a pending application in the European Court of Human Rights. However, the right to privacy has been developed not by Mr Justice Eady, but by the Court of Appeal and by the Appellate Committee of this House in a number of recent cases.
	How, then, is the judiciary to respond to ill informed criticism? Most judges are understandably unwilling to enter into a public debate with their detractors, so who is to respond on their behalf? I would welcome the views of Leader of the House on whether the Lord Chancellor and Secretary of State for Justice sees it as his responsibility to respond to criticisms of judges such as those from Mr Dacre.
	I well understand the responsibility of the Lord Chancellor for rebuking any of his colleagues in government who make ill informed or abusive attacks on the judiciary. However, I have concerns about an independent judiciary relying and being seen to rely on a government Minister to defend judges from unjustified criticism. An independent judiciary should, where necessary, be seen to defend itself. I therefore welcome the support given in the report of your Lordships' committee to the role of the Judicial Communications Office in providing judicial spokesmen to respond to criticism. I hope that, when necessary and appropriate, there will be senior members of the judiciary able and willing urgently to communicate a judicial and judicious response to ill informed criticism which may, unless answered, damage the judiciary's reputation.
	In conclusion, judges have a very difficult job to perform. It is, of course, not a simple "Strictly Come Dancing" approach of marking a performance and making a few comments of an insulting nature. Judges are all too well aware of the unreliability and inconsistency of the evidence that they hear in court, the lack of clarity in the laws that they apply and the conflict in the competing values that they need to uphold. Judges know above all that people's lives may depend on their judgments. Should this child be taken away from his parents? Should this woman be deported to a country where she fears persecution? What rulings should be made in this criminal trial that may result in the defendant spending years in prison? We are fortunate in this country in the quality of the judiciary that makes these difficult and important decisions. An independent judiciary should not be shy about responding to ill informed and damaging criticism.

Lord Norton of Louth: My Lords, I am delighted to follow the noble Lord, Lord Pannick, and congratulate him on a splendid maiden speech. This debate is clearly tailor-made for someone with such great experience in the law. We have already heard about some of that experience from the noble Lord, Lord Lester. As the noble Lord, Lord Pannick, touched upon, he was called to the Bar in 1979 and served as a deputy High Court judge. He is well known for appearing in some of the leading cases of recent years, one or two of which he has already alluded to. He is also well known for his erudite and informative column in the law section of the Times. I declare an interest as a regular reader. I speak for the whole House when I say that we look forward immensely to his contributions to future debates.
	I add my congratulations to the Constitution Committee on producing this report. I speak as someone who was not a member of the Committee at the time of the main inquiry, although I was a member when it published its follow-up report.
	The relationship of the judiciary to the Executive and Parliament has changed dramatically over the past four decades. Our membership of the European communities created a new judicial dimension to our constitutional arrangements. As the Constitution Committee report makes clear, that judicial dimension has been reinforced by the Human Rights Act. These changes have thrust the courts into a new role, one not of their own choosing but imposed upon them by Parliament. I entirely take the point that we should not be criticising the courts for doing the very thing that we, as Parliament, require them to do. To the European Communities Act and the Human Rights Act we must now add the Constitutional Reform Act 2005. That has produced and will produce important changes in how the judiciary operates in this country. We are therefore dealing with a dynamic situation. It is important that we are able to make sense of the complex dynamics at work.
	The Constitution Committee addresses the changing landscape from the perspective of the rule of law and the independence of the judiciary. Those it rightly recognises as core constitutional principles. Its recommendations flow from its focus on those principles. Those recommendations are appropriate and, as is clear from the Government's response and developments since the report was published, have helped to shape the debate about the relationship of the judiciary to Parliament and the Executive.
	I would pose a broader starting point, which is to identify the constitutional framework that we want for the United Kingdom. Once we have determined that, we can locate the role of the courts within it, otherwise we have a judiciary that is being given new roles as a consequence of implementing disparate policy goals. It is moving in new directions without us being clear as to the eventual destination. We need to be clear as to the intended constitutional end-point, otherwise where we end up is determined by a series of disparate and discrete changes, each justified on its own merits but not related to a wider view of where we should be going. I therefore believe that there is a case for establishing a royal commission on the constitution, to look holistically at our constitutional arrangements. I shall return to that on a later occasion. The report before us will make a significant contribution to such a study.
	In analysing and influencing what is happening, the report makes a weighty contribution. In particular, it helps to identify and influence the way in which the judiciary has adapted to implementation of the Human Rights Act and the Constitutional Reform Act. Taken together, those two Acts have placed the judiciary in a difficult and exposed position. The courts are vested with responsibility for interpreting and applying the 1998 Act. The nature of convention rights offers scope for interpretation on important measures of public policy. Cases in which the Act has been engaged have been relatively few in number but some have been extremely high profile and contentious, not least in respect of privacy and anti-terrorist legislation. The courts have been subject to criticism as a result, from both journalists and Ministers, as the noble Lord, Lord Pannick, explained.
	The judiciary will be even more exposed as a result of the designation of a Supreme Court and its location away from the Palace of Westminster. The current position is that the Law Lords do not participate in legislative deliberations—there is separation in this House between the judicial and legislative parts—but they observe what goes on. They have an appreciation of the parliamentary process. Conversely, the Members of this House have some appreciation of the work and quality of the Law Lords. The House is able to operate as something of a buffer between the Law Lords and the Executive. Once the court moves across the road and, more especially, in time, as current Law Lords are replaced by judges who have no experience of this House, the advantage will be lost. We may even witness clashes between Parliament and the courts, in part because of the Acts of 1998 and 2005, but also because of the decisions of the courts to look not only at the parliamentary record in case of ambiguity but at why Parliament enacted a measure to determine compatibility with convention rights. I believe the Wilson case in 2003 to be even more important than Pepper v Hart for its implications for the relationship between the courts and Parliament.
	The changes thus create the potential for conflict. That is where the report comes into play and has proved extremely valuable. How are the courts to adapt to the new situation? How is a constructive relationship with Parliament to be achieved? The committee has done a valuable job in identifying not only what the responsibilities of Ministers should be, but how judges may be accountable to Parliament without Parliament itself encroaching on judicial independence. One of the findings of the Constitution Committee in its report The Regulatory State: Ensuring its Accountability was that independence and accountability do not necessarily conflict with one another.
	I therefore see no insuperable problems deriving from the committee's recommendations covering the relationship of Parliament and the judiciary. The report was published over a year ago, and we already see some of its proposals beginning to bear fruit, not least the recommendations for an annual report and for the Lord Chief Justice to appear each year before the Constitution Committee. Though the noble and learned Lord, Lord Phillips, said, as my noble friend has mentioned, that he did not want to bind his successor by committing to an annual report, he did produce a weighty and informative report earlier this year that sets an admirable standard for his successor to emulate, all being well, on an annual basis.
	The noble and learned Lord, Lord Phillips, has appeared before the committee, accompanied on the last occasion by his successor, Sir Igor Judge, now the noble and learned Lord, Lord Judge. Those meetings have established that it is possible to discuss issues of general concern without going into the merits of particular cases, and to do so in a way that is beneficial to the judiciary and to Parliament. I believe that this is apparent from the committee's follow-up report, not only in its content but in the fact that it embodies, as my noble friend mentioned, the first response from the judiciary to a Select Committee report. This form of engagement may serve to indicate to members of the judiciary that appearing before a Select Committee may be appropriate in certain circumstances, in the way suggested in the report.
	We are thus seeing a relationship form between Parliament and the judiciary that maintains the independence of the judiciary while allowing it to discuss with Parliament matters affecting the administration of justice. That engagement needs to be measured and transparent. The initial experience is positive, and I pay tribute to the committee both for its report and for pursuing it in the way that it has.
	The proposal for written representations from the Lord Chief Justice, under Section 5 of the 2005 Act, to be published in Hansard and then debated, with a response from government as quickly as possible, is a sensible one. It received a welcome from the judiciary, and I note the Government's commitment to endeavour to respond in good time to such representations—though it may have been even better had the words "to endeavour" been omitted.
	The only other recommendation I wish to touch upon—and it will come as no surprise to the noble Baroness the Leader of the House—is that concerning post-legislative scrutiny. The report discusses it in the context of judicial interpretation of parliamentary legislation in particular contexts. The Government in their response noted that the courts would be under no obligation to consider a Select Committee's views in relation to interpretation. I accept that, but I doubt if this is what the committee had in mind. Judicial interpretation is relevant where it has an effect on the implementation of legislation and thus can be taken into account in evaluating whether a measure has achieved its intended purpose.
	Since the Government's response to the report was published, they have published their paper on post-legislative scrutiny, which is very welcome and a great step forward, although I believe that a dedicated committee on the subject is needed, as recommended by the Law Commission. As the noble Baroness the Leader of the House will be aware, I think it is desirable for the House to debate the Government's paper and, indeed, the Law Commission's recommendation.
	I revert to my earlier observation. There is a need to look at our constitutional arrangements holistically. The role of the judiciary has to be set within a clear view of what we expect it to do within our constitution. We need to look at this from the top down and not simply from the bottom up. This report is extremely welcome; I believe it has already proved its worth. We need to build on it in looking at the type of constitutional framework we think is appropriate for the United Kingdom.

Lord Tyler: My Lords, I am delighted to echo the congratulations to the noble Lord, Lord Pannick, on his extremely powerful maiden speech. Clearly we are in the presence of someone who, I suspect, will contribute regularly to the proceedings of your Lordships' House.
	Looking round the House this evening, I feel as though I am the Daniel in a den of legal minds, which puts me in the embarrassing position of being the novice or the lay man. In that capacity, I shall do my best to pick up one or two points that seem to me, as the non-expert, to be important and I shall reflect some of the points made by the noble Lord, Lord Norton, about the need for a more holistic approach to questions raised by the committee in its reports. In doing so, I pay tribute to the noble Lord, Lord Goodlad, and his colleagues on the Constitution Committee. I was delighted that he made mention of our late and much lamented friend Richard Holme.
	This debate comes at a salient moment, because we are due to consider a constitutional renewal Bill in the new Session. The noble Lord, Lord Norton, my noble friend Lord Maclennan and I have been sitting on a Joint Committee conducting pre-legislative scrutiny on that Bill. It is significant that some of the issues that have been raised this evening have reappeared already in draft form, but perhaps not in as satisfactory a form as we had hoped. A number of colleagues on that committee and I filed a minority report on the role of the Attorney-General, to which I shall refer.
	The reports before us this evening touch on the ministerial code. I certainly agree that Ministers should keep their sabre-rattling to a more muted tone than they have in the recent past. Frankly, irresponsible, headline-grabbing soundbites such as those made by Dr Reid or Mr Blunkett, designed to play to the Murdoch media gallery, should be consigned to the previous era of spin over substance.
	In evidence to the committee, the Lord Chancellor pointed out how important that restraint was for him. The fact that he recognised that is very healthy, given that he is the first Lord Chancellor to sit in the Commons. As the noble Lord, Lord Pannick, said, his discipline is shared with other Ministers. Section 3(1) of the Constitutional Reform Act states:
	"The Lord Chancellor, other Ministers of the Crown and all with responsibility for matters relating to the judiciary or otherwise to the administration of justice must uphold the continued independence of the judiciary".
	There is also the broader question of how the ministerial code is determined and enforced. Again, the committee has given us helpful advice. It surely cannot be satisfactory that the code under which Ministers of the Crown conduct themselves is solely in the gift of the Prime Minister, like a sort of headmaster's rule book, and that Parliament has no role in scrutinising its principles or agreeing its content.
	A separate but related issue is not just how Ministers conduct themselves, but how Prime Ministers behave when they decide, at a stroke, to reorganise the way in which government works. That was true with the Ministry of Justice, but that was not the first occasion on which there was a dramatic change to the architecture of Whitehall without any reference to Parliament. It is important that, in future, we should consider carefully how major changes to the responsibilities of government departments are put in place and ensure that they are justified and scrutinised here in Westminster. Frankly, Friday afternoon changes by press release, sometimes even during recess, are no substitute for effective parliamentary scrutiny. It is clear that new mechanisms to make the process more rational would not just be an unhelpful roadblock for the Prime Minister of the day but might help him to get the changes right at first attempt.
	No one can seriously believe that the Lord Chief Justice and the Lord Chancellor would have been left in the dark about the creation of the Ministry of Justice if those matters were not drawn up on the back of Downing Street envelopes. Very often, I fear, the architecture of governance has become a game of musical chairs—how do we move individuals around within the Cabinet?—rather than about ensuring that the way in which departments are given responsibilities is logical, rational and well examined by Parliament. You cannot knock down a terraced house without other houses in the row being affected and Prime Ministers cannot simply demolish the operation of one department without it fundamentally affecting others.
	Similarly, as the reports have indicated, the fundamentally important relationship between the Executive and the judiciary should not be the exclusive province of either or both together to agree. There is a role for Parliament here, just as there is in endorsing the ministerial code. The committee's report uses fairly typical "committee-ese" in recommending,
	"that consideration be given to introducing a formal mechanism for laying revised versions of the Concordat before Parliament".
	I hope that the Leader of the House will this evening be able to respond rather more formidably and forcefully to that recommendation.
	The committee repeats and endorses the view of the Lord Chief Justice, who has warm words for our present Lord Chancellor. Indeed, I think that this House and another place believe that Jack Straw has proved himself a deft—and even rather crafty—political operator in respect of constitutional reform. His evidence to the committee shows that he takes his role in that respect, and in relation to the judiciary, very seriously. The combination of his responsibilities with those of the Secretary of State for Justice—again covered by the work of the committee—appears to work well with him. Whether it would always work well, with another individual of less capacity or experience, is something that we should be concerned about.
	Paragraph 20 of the follow-up report raises the important issue of whether judges should appear before Select Committees and how they should do so. There is an important issue here about the separation of powers. I am not sure that the noble Lord, Lord Norton, and I entirely agree about the need for a written constitution, but if we were writing a constitution for anywhere else in the world—as, indeed, British jurists have—the separation of powers between the judiciary, the legislature and the Executive would be an absolutely fundamental principle. Making judges in any way answerable to a Select Committee seems a step too far. I think that the balance is right in the committee's report, but it is still something that we should be careful about.
	Similarly, I note the comments about the code of practice for editors in paragraph 33. I would regret Parliament going too far down the road of instructing how editors should regulate themselves. That seems to be the sort of censorship that other countries have suffered from and to which, perhaps, the noble Lord, Lord Pannick, was referring. I have been a journalist and, frankly, what editor is not going to use a quote like that given by David Blunkett when he was Home Secretary? He said:
	"I just want judges that live in the same real world as the rest of us".
	By legitimising that sort of wording, Home Secretaries and other Ministers are giving the media, particularly the tabloid media, opportunities that they will inevitably take. There are plenty of other examples. If it were not so late, I could report several such instances involving previous Home Secretaries. Dr John Reid learnt much at the feet of his predecessors.
	Where do we go from here? The Joint Committee on the Draft Constitutional Renewal Bill, on which I sat with my noble friend Lord Maclennan and the noble Lord, Lord Norton of Louth, was clear in chapter 8 of its report that the draft Bill did not meet the expectations raised by the Prime Minister's Statement in July 2007, the Green Paper that followed it and even the White Paper that followed that. Although it would not be appropriate at this hour to quote in extenso from chapter 8, I hope that the Leader of the House will be prepared to take back to her colleagues the strong view of the Joint Committee that the very narrow scope of the draft Bill did not fulfil the hope and expectations that the Prime Minister raised in his original Statement on constitutional reform. Uniquely, I think, both Houses and Members of all parties were unanimous in this. Specifically, The Prime Minister said that it was necessary for Parliament to be given a much wider role in controlling the work of the Executive and holding Ministers to account. Frankly, the draft Bill does not do that. There are strong comments to that effect not only in chapter 8 but throughout the report.
	I referred earlier to the role of Attorney-General. Colleagues from all parties and I submitted what was, effectively, a minority report. Again, I am not going to quote from it at length, as that would not be appropriate. We started from the premise that the Prime Minister was right when he said:
	"The role of Attorney-General, which combines legal and ministerial functions, needs to change".—[Official Report, Commons, 3/7/07; col. 817.]
	He said that, not the committee. It was in his first Statement on the important issue of constitutional renewal. The primary colours in those bold words had faded to a murky grey by the time we reached the draft Bill.
	Anyone who thinks that this problem has gone away should read the comments made by the noble and learned Lord, Lord Bingham, about the advice given by the then Attorney-General on the war in Iraq. I regret that it was not possible for the noble and learned Lord, Lord Goldsmith, to be with us this evening; I was not aware of that until the debate started. The noble and learned Lord, Lord Bingham, said:
	"If I am right that the invasion of Iraq by the US, the UK and some other states was unauthorised by the Security Council, there was, of course, a serious violation of international law and of the rule of law".
	The reports are extremely interesting, but the interrogation of the present Lord Chancellor by the committee on 23 October 2007 was even more interesting. I read it again this evening; one of the advantages of starting rather late is that one gets an opportunity to read all the evidence. In his evidence in that appearance before the committee, Mr Jack Straw said that,
	"the Prime Minister thought—and so did Baroness Scotland—that it was sensible to try to ensure that there was stronger protection for that role"—
	the role of Attorney-General—
	"and maybe in some respects to separate the role or to make it clearer".
	That is strong stuff, but the fact is that, as the draft Bill is constituted, that is not likely to happen.
	When the Queen's Speech takes place in a couple of weeks' time and when, in due course, the Government publish their Bill, I hope that they will look carefully at the recommendations of the Joint Committee, but I hope that they will also think carefully about what Mr Straw said to the committee at that hearing. I refer to his answer to question 10, in which he said that,
	"fundamental to the operation of the Rule of Law within a democracy is that there should be an understanding about the separation of powers and particularly the separation between the Executive and the Legislature on the one hand and the Judiciary on the other hand, and a mutual respect about the different roles that each has. That therefore requires there to be a responsibility on politicians, those in the Executive and Legislature—and of course in our system we are all mixed up—to respect the role of the courts".
	The Joint Committee strongly recommended broadening the Long Title of the draft Bill, and it seems that Mr Straw intended that all along. I hope that the noble Baroness the Leader of the House will be able to give us an undertaking that some of the concerns expressed in this House, by our committee and during this debate, as well as by the Joint Committee, will be taken into account.
	Lord Holme, who was then in the chair, said to Mr Straw:
	"So you see it as a positive advantage that it is a portmanteau Bill and people can put other things in the portmanteau?".
	Mr Straw replied simply: "I do". It is not often that a senior Minister gives an answer as specific or as brief as that. I hope that the Government will now respond not just to the Constitutional Committee's reports but to that of the Joint Committee looking at the draft Bill.
	My noble friend Lord Lester, who has done such pioneering work on the royal prerogative, will have a great deal to contribute to that portmanteau. So will other Members of your Lordships' House, not least the noble Lords, Lord Pannick and Lord Norton, who have made such sensible contributions to this debate. If we do not take that opportunity, not just the work of our committee but all the preparations since the very moment that the Prime Minister indicated the priority that he was going to give to constitutional renewal will be wasted.

Lord Maclennan of Rogart: My Lords, this has been a remarkable debate that has ranged quite widely, as might have been anticipated from the scope of the two reports that we are considering tonight. It has been made a memorable debate by the outstanding maiden speech by the noble Lord, Lord Pannick, whose presence in this House adds not just great experience of the interrelationship of the judiciary and Parliament but great wisdom and sensitivity, which was reflected in the four points he wanted to make in the relatively short time available.
	The noble Lord was right to say that tension between Ministers and judges is inevitable, as he was right to point out that sometimes criticism of judges is appropriate, provided that it is delivered in a reasoned way with measured language. The tone of his contribution was immensely encouraging and we very much look forward to hearing from him again. The thrust of our interest in this place in constitutional reform and the acceleration of the consideration of such matters is something that will no doubt bring him back on a number of occasions.
	It is appropriate to express the warmest appreciation to the noble Lord, Lord Goodlad, and his committee and to remember with gratitude the role played by my late friend Lord Holme of Cheltenham. The noble Lord, Lord Goodlad, refreshed our recollection of the outstandingly important points in the report. I would not presume at this hour to rehearse the main issues that it lighted on. Rather, I shall confine my remarks to one or two points of interest. I am grateful to the committee for having raised them; I may have a slightly different emphasis in animadverting about them.
	One of the greatest achievements of the committee may be to have induced agreement that there should be an annual report from the Lord Chief Justice. There must be—notwithstanding the independence of the judiciary, which Parliament must respect—an interface between Parliament and the judiciary, and that is best handled in this way, with the considered deliberations of the judiciary expressed by the Lord Chief Justice, especially with regard to issues of management and budgetary concerns. Those are entirely proper issues for Parliament to consider. It is also right that they should be discussed in advance of determinations being made.
	I note the criticisms made about the creation of the Ministry of Justice without much prior deliberation, but these matters have led to the valuable framework document, which will bring together the responsible Minister and the head of the judiciary. Here I slightly disagree with the committee report. That document has to a considerable extent been overtaken by the concordat set out in 2004 during the passage of the Constitutional Reform Act. That document—although an important historical document, and one that set out the understanding of the Minister, the Lord Chancellor of the day, who was responsible for the proposed reform, and of the judiciary as to how it might operate in practice, and some of the fundamental values and principles to be supported by the legislation—is none the less an historical document. It is a document which is of value in that context but I doubt whether it makes sense to treat it as though it were some sort of statutory instrument which needs to be revised if there are changes of political emphasis. If there are such changes, it is of course desirable that they should be made explicit so that they can be discussed, but it should not be seen as a kind of fundamental law governing the relations between the Executive and the judiciary.
	My noble friend Lord Lester in his comprehensive speech raised a number of extremely important issues, not least his reflections on the prerogative powers. These are matters which, as my noble friend Lord Tyler mentioned, will be reviewed again if the Government bring forward their Constitutional Renewal Bill in anything like the form considered by the Joint Committee prior to the Summer Recess. There will be other opportunities for deliberating on these matters but I wish to say how strongly I support the view of my noble friend that the prerogative powers should be drawn from Parliament and based on statute. There was a clear watering-down of the Prime Minister's initial statement expressed so eloquently in his Green Paper on the role of Parliament, particularly in respect of the prerogative powers, which was not welcome. I hope that matter has been reviewed in the light of the consideration given by the Joint Committee.
	The noble Lord, Lord Norton, as we might expect from such a thoughtful Member of the House, raised the remarkably interesting question of the need for an agreed constitutional framework in which the relationships between the Executive, Parliament and the judiciary can be developed. I was not entirely certain that he was suggesting that a written constitution is the answer, though my personal view is that the kind of discussion that he proposed, led by a royal commission, might very well point in that direction. In so far as we have two major constitutional matrices—the European Communities legislation and the Human Rights Act which now cover a major part of our constitutional provision—it would not be such a departure from British tradition to move a few steps further in that direction.
	One step further which I would not welcome, however, is the proposed Bill on rights and duties to sit beside the Human Rights Act. My noble friend Lord Lester, in a charitable spirit as one would expect, expressed the view that if such a piece of legislation was proposed, it might assist in clarifying areas of uncertainty. I hope I do not misrepresent him. In the sphere of human rights the drafting by those distinguished British lawyers and politicians of the original European convention was very apt. Sir David Maxwell Fyfe, I believe, was one of them—a Member of the Conservative Government and subsequently Lord Chancellor. It is worth saying that these rights are expressed in the broadest and most general terms, and that their effectiveness in protecting the citizen depends on the wise judiciary applying the jurisprudence that has grown over the 50 years of their existence, both in Strasbourg and now more recently in our own country. Parliament would not necessarily find it an easy task to define these matters, the application of the principles of which may well be best left to the judiciary.
	I fear that the complexities of seeking to embody aspirations for a law of privacy in a separate law might have a contrary effect to the one intended. The balance between freedom of expression and privacy is clearly contained in the convention, and in the Human Rights Act as a result, and no amount of distortion by such witty and amusing writers and speakers as Mr Paul Dacre can or should be allowed to detract from the power of the courts to apply these things. I was grateful to the noble Lord, Lord Pannick, for reminding us of the extent to which the Court of Appeal and others have considered these issues; they have not been decided entirely by one judge, who was the butt of the attack by the editor of the Daily Mail in his speech to the Society of Editors.
	It is worth putting on to the record of our proceedings two statements made by Paul Dacre in that speech. First, he said that,
	"no day is too busy or too short not to find time to tweak the noses of the liberalocracy which effectively run Britain",
	Secondly, he drew attention to what he described as,
	"the sheer bloody mischief that is the chemistry of any good paper".
	I have a sense that that speech was distinctly over the top. There was an element of mischief in it, too.
	It is also worth noting that Mr Paul Dacre, in his remarks about human rights and about privacy in particular, rather candidly expressed an opinion that may offset some of his criticisms of the judge. After praising the press for its role in public shaming—and, as it were, in setting standards—he went on to say:
	"Put another way, if mass-circulation newspapers ... don't have the freedom to write about scandal, I doubt whether they will retain their mass circulations with the obvious worrying implications for the democratic process".
	It seems to me that that consideration was very much at the front of his mind when he delivered that speech, and I am bound to say that I cannot see that all journalists regard the peddling of scandal as a necessary duty to retain the freedom of the press and its role in our democratic processes.
	This debate has been valuable, not least for giving wider attention to an important and valuable report. Some of its recommendations have already been acted on, and I hope that we will continue to hear more from the Constitution Committee about these matters.

Lord Kingsland: My Lords, first, I should like to thank my noble friend Lord Goodlad for his excellent report and his opening speech. Equally, I congratulate the noble Lord, Lord Pannick, on his memorable maiden speech and echo everything that has been said about it by other noble Lords. The noble Lord, Lord Pannick, is a practising barrister of colossal distinction and a journalist of wit and perspicacity. He will undoubtedly adorn the Cross Benches and we look forward to hearing a great deal from him.
	Three initiatives have influenced the relationship between the Executive, the judiciary and the legislature since the Government came to power in 1997: the passage of the Human Rights Act 1998 and the Constitutional Reform Act 2005, and the amalgamation of the office of the Lord Chancellor with that of the newly created Secretary of State for Justice in 2007.
	I do not propose to say very much about the impact of the Human Rights Act, partly because we are very late and partly because your Lordships will have an opportunity to consider precisely that matter in the debate scheduled for next Monday. I will simply underline the importance of two generally accepted, indeed obvious, features. First, there is little doubt that the courts are making more searching analyses of the exercise of executive discretion than hitherto as a consequence of applying convention principles to government decision-making. Secondly, judicial reasoning by reference to the articles of the convention gives the impression that the judges are acting independently of, and above, Parliament. Hitherto, whenever a court quashed a judicial decision, it always did so by construing an Act of Parliament and concluding that their judgment was what Parliament really intended. For both those reasons, the courts are often described as encroaching on territory hitherto occupied by the Executive and Parliament, thus justifying, according to the fourth estate, their heightened profile in the media. That is a fact that the judiciary will have to accept.
	The decision to abolish the office of Lord Chancellor in June 2003 and, having failed to achieve that objective, the decision to amalgamate it with a newly established Ministry of Justice in June 2007, were made without any prior consultation with Parliament or the judiciary. The Select Committee is rightly scathing about this.
	Neither change, I should add, was inspired or foreshadowed by any form of constitutional analysis in government. Just as the removal of the Lord Chancellor was motivated by the desire to get rid of someone— Mr Blair did not have the courage to fire the noble and learned Lord, Lord Irvine, so he sought to make him redundant—so the creation of the Ministry of Justice in 2007 was motivated by Mr Reid's desire to get rid of something, a responsibility he no longer wished to face up to; namely, the appalling state of prisons and the Prison Service.
	In its subsequent legislative quest to abolish the office of Lord Chancellor, the Government totally failed. Some of the changes proposed in the Bill they advanced were long accepted as necessary, such as removing the right of the Lord Chancellor to sit as a judge and making the judicial selection process more transparent. Of much more significance is the way in which the legislature extended and strengthened the Lord Chancellor's role in protecting our judges and preserving the rule of law. As a result, the Lord Chancellor emerges as, at least potentially, a more powerful figure constitutionally than hitherto.
	Before the Act, the only protection for judges lay in the centuries-old statutory provision that High Court judges and above could be dismissed only by an Address of both Houses of Parliament. This guaranteed the independence of individual judges against arbitrary dismissal by the Executive; however, it did no more than that. Since 2005, however, the Lord Chancellor has been responsible for protecting the independence of the judiciary as a whole from any form of political interference, including from within the Cabinet itself, and he is provided with statutory powers to do so. Moreover, the constitutional convention, hitherto applied unevenly by successive Lord Chancellors, that the Lord Chancellor is the guardian of the rule of law, is now enshrined in the 2005 Act. Accordingly, the Lord Chancellor is now under a statutory duty to ensure that draft parliamentary legislation and executive decision-making in Cabinet reflect the rule of law. These new statutory duties are now expressly enshrined by Section 17 of the 2005 Act in the text of the oath that the Lord Chancellor is required to take before assuming office. In the light of these powers and responsibilities, it is hard to understand how the events surrounding the Sweeney case were allowed to develop in the way they did.
	Since June 2007, the office of Lord Chancellor has been merged with the newly established Ministry of Justice. The present incumbent, the right honourable gentleman Mr Jack Straw, enjoys good relations with the judiciary and, as the committee observes, some progress is being made in immunising the courts budget from the depredations of other spending departments. However, I wonder whether such an amalgamation is constitutionally desirable.
	Criminal justice decision-making is highly sensitive to popular opinion. As the policy-making Minister, the Lord Chancellor is subject to myriad, often inconsistent spending, sentencing and legislative demands to which he must respond, and all of which are themselves capable of conflicting with his duties under the Constitutional Reform Act 2005. For example, in the design and application of criminal justice legislation, legislation which is at the intersection of state power and individual rights, the Lord Chancellor is the target of many judicial reviews, bringing him into conflict with the judiciary, with whom he has a legion of obligations to co-operate, and undermining his status as the individual with responsibility for upholding the rule of law by constantly being sued for the alleged breach of it.
	The responsibilities of a Lord Chancellor, I suggest, are not those of a policy-maker. Policy-making is essentially majoritarian, reflecting the mood of the nation. Justice is, among other things, about ensuring that the structures and processes are in place which guarantee that the conversion of policy into law conforms with constitutional principle. There is inevitably conflict between these two roles. They simply do not mix.

Baroness Royall of Blaisdon: My Lords, I begin by thanking the noble Lord, Lord Goodlad, for moving this debate and for drawing the attention of the House to the reports of the Constitution Committee on relations between the Executive, the judiciary and Parliament. The noble Lord, Lord Norton of Louth, rightly pointed out that progress has already been made on some of the conclusions, including on post-legislative scrutiny. It is clear from today's debate that a healthy relationship between the judiciary, the Executive and Parliament is one that respects that the independence of the judiciary is fundamental to the effective working of our constitution and judicial system.
	I also thank the members of the Constitution Committee for their careful consideration of how we might best protect and enhance that relationship. I congratulate the noble Lord, Lord Pannick, on his excellent maiden speech. He is right that the tensions between the Government and the judiciary that he cited are healthy. I pay tribute to the work of Lord Holme of Cheltenham. I also take this opportunity to thank the noble Lord, Lord Lester, for the invaluable contribution he has made as an adviser to the Government. It would not be appropriate for me to comment on this occasion on the views expressed about the Constitutional Renewal Bill. I shall merely say that the Government are now considering the Joint Committee's recommendations, but I note the strong views expressed in the House today and I will bring them to the attention of my colleagues.
	The noble Lord rightly said that citizens have a fundamental right of access to the courts, but he then added that the cuts to the Ministry of Justice undermine that right. I agree that access to justice is a fundamental right, but the Government are acutely aware of the need to balance responsible management of the public purse with ensuring that those who require access to the courts are able to do so, especially the vulnerable.
	The Government have taken, and continue to take, active steps to reinforce the independence of the judiciary by the establishment of the Supreme Court and the Judicial Appointments Commission; bringing forward the Constitutional Reform Act 2005, which reinforced the obligation on Ministers to uphold the continued independence of the judiciary and clarified the respective roles of the Lord Chancellor and the Lord Chief Justice of England and Wales; making the Lord Chief Justice the head of the judiciary in that jurisdiction, with equivalent provisions applying in Northern Ireland; and taking practical steps to improve the way in which the judiciary is consulted and involved in key decisions in the operation of the justice system, such as through the concordat and the framework document now in place that defines the partnership approach agreed between the Lord Chancellor and the Lord Chief Justice with respect to the operation of Her Majesty's Courts Service.
	I shall refer today specifically to the issues raised in the committee's follow-up report, as they represent areas where the committee had some continuing concerns. The committee is concerned that the independence of the judiciary is effectively protected. On that point, we are in full agreement. The Government recognise, too, that the role of the Lord Chancellor is of central importance in this regard. As stated by the Lord Chancellor in his evidence to the committee, there are no plans to separate the roles of Lord Chancellor and the Secretary of State for Justice at this time.
	Lord Chancellors have always been mindful of the respective responsibilities of the judiciary and the Executive. The Constitutional Reform Act 2005 obliges Ministers to uphold the continued independence of the judiciary and reinforces the separation of powers. It also clarifies the respective responsibilities of the Lord Chancellor and the Lord Chief Justice, with the Lord Chief Justice having responsibility for the welfare, guidance, training and employment of the judiciary and for representing the views of the judiciary to Parliament and Ministers. The establishment of the Supreme Court will contribute further, creating a separate and visible final court of appeal.
	There can be no disagreement between us on the principle that Ministers should not undermine the rule of law through inaccurate or ill-considered comment with respect to the actions of any individual judge. The committee was concerned that there should be clear and unambiguous guidance to Minister generally setting out the principles governing public comment by Ministers on individual judges. Section 1 of the Ministerial Code specifies that it should be read against the background of the overarching duty on Ministers to comply with the law, including international law and treaty obligations, and to uphold the administration of justice and protect the integrity of public life. The Government will further consider the committee's recommendations when the code is next revised.
	We also agree that the responsibilities of Ministers should extend to consulting the judiciary as early as possible on issues that affect it. As the committee identified, there are issues where the Executive and the judiciary must work in partnership in the interests of justice. This is an area where both have made significant efforts to make that relationship work effectively. The noble Lords, Lord Tyler and Lord Goodlad, expressed concern that the concordat had not been updated, and I noted the views expressed by the noble Lord, Lord Maclennan of Rogart.
	I agree that any fundamental change in the nature of the relationship between the Executive and the judiciary is a matter for Parliament. I also agree that, while the concordat is not statutory, it is important that the principles underpinning the relationship between the judiciary and the Executive are kept under review. The framework document sets out in detail how the relationship between the Executive and the judiciary should work in practice with regard to Her Majesty's Courts Service. The Government will consult and work with the judiciary to ensure that the concordat remains live and relevant, and that changes to both the framework document and the concordat are properly put before this House.
	The framework document agreed in April 2008 between the Lord Chancellor and the then Lord Chief Justice sets out in detail how the partnership approach agreed between them should work in practice. The Government welcome the evidence given to the committee by the noble and learned Lord that this resolved perceived tensions in the relationship between the judiciary and the Executive. Clearly, the committee's recommendations in relation to the judiciary must be a matter for the judiciary, although the Government will obviously work with the judiciary if requested to do so, and will consider carefully any proposals put forward for parliamentary scrutiny in this area.
	Another matter raised by the committee was the possibility of the courts, in appropriate cases, giving advisory declarations on the compatibility or otherwise of proposed or recently enacted legislation with the Human Rights Act. As we stated in the Government's response to the committee's recommendations, we are not convinced of the utility of advisory declarations at this stage. The Government attach considerable importance to the grounding of cases before the courts in real and substantial factual situations. This assists the courts in considering the compatibility of the law with convention rights, by enabling them to consider not only the strict words of any given statute, but also the legal and practical framework and the context in which it is given effect. I must add, however, that the Government are prepared to keep an open mind upon this issue.
	The noble Lord, Lord Goodlad, asked for the Government's view on the committee's recommendations on a responsible press. We all wish to see accurate and responsible reporting, and any assistance that the Press Complaints Commission can give in this regard is of course welcome. I join other noble Lords in wishing the noble Baroness, Lady Buscombe, well in her new position.
	The noble Lord, Lord Pannick, asked if the Lord Chancellor should speak on behalf of the judiciary. The noble Lord, Lord Kingsland, rightly pointed out that it is the Lord Chancellor's responsibility to uphold judicial independence. While it must be right that an independent judiciary can speak for itself, the Lord Chancellor has a role in so far as this is consistent with his responsibilities to uphold judicial independence.
	The hour is late. In conclusion, I thank the noble Lord, Lord Goodlad, and all noble Lords who have spoken for their invaluable contributions to the debate. I hope that all will be reassured that the Government both recognise the fundamental importance of the relationship between the judiciary, the Executive and Parliament, and are prepared to act to support the effective working of that relationship. However, we cannot afford to be complacent in this area. Therefore, I thank the committee for all that they are doing to ensure that we keep this relationship under continual review. I end by thanking the staff of the House for unexpectedly being here at this late hour.

Lord Goodlad: My Lords, I thank the noble Baroness the Lord President for her reply, and echo her thanks to the staff of the House for being with us until such a very late hour. I also acknowledge the continuous presence not only of the noble Baroness the Lord President, but also of the noble and learned Lord the Advocate-General for Scotland throughout the debate, the Whip on duty the noble Lord, Lord Patel, and, for most of the debate, the Convenor of the Cross Benches, the noble Baroness, Lady D'Souza.
	We have had extremely important contributions from the noble Lords, Lord Lester of Herne Hill and Lord Pannick. Convention prohibits me from seeking to echo the tribute that the noble Lord, Lord Norton, paid to the noble Lord, Lord Pannick. I merely confine myself to saying that I hope that he will make further contributions to our debates. I thank the noble Lord, Lord Tyler, for his contribution. I also thank the noble Lord, Lord Maclennan of Rogart, who echoed the committee's sentiments about updating the concordat. I thank the noble Lord, Lord Kingsland, who brought, as always, great wisdom and questions to our debate. Above all, I thank the noble Baroness, who has stayed to a very late hour. The committee will scrutinise with great care all that has been said in this extremely analytical debate. I detect a confluence of views about most things, but I also detect a determination on the part of your Lordships that we should continue to scrutinise these matters with very great care.

On Question, Motion agreed to.

Constitution: Executive, Judiciary and Parliament (Follow-up Report)

Lord Goodlad: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, That this House takes note of the report of the Constitution Committee on Relations between the executive, the judiciary and Parliament: Follow-up Report (11th Report, HL Paper 177).—(Lord Goodlad.)

On Question, Motion agreed to.

Education and Skills Bill

The Bill was returned from the Commons with the amendments agreed to.
	House adjourned at 11.01 pm.